December is the month to take final actions that can impact your tax outcome for 2021. Taxpayers with significant boosts or declines in income, modifications in marital status or dependent status, and those who sold off residential or commercial property during the course of 2021 ought to seek a tax planning consultation appointment.
If you are an employee who works for tips and was given more than $20 in tips throughout November, you are needed to report them to your employer on internal revenue service Form 4070 no later than December 10. Your company is needed to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular incomes are insufficient to cover the FICA and tax withholding, the company will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be needed to pay the uncollected withholding when your return for the year is filed.
Last day to withdraw funds from a Traditional individual retirement account and prevent a penalty if you were born prior to July 1, 1949. You might postpone your very first distribution to April 1, 2022 if your birth date is July 1, 1949 through December 31, 1949. If you are needed to take a distribution in 2021 and the organization holding your individual retirement account will not be open on December 31, you will want to arrange for withdrawal prior to that date.
Last day to pay deductible expenses for the 2021 return (does not apply to individual retirement account, SEP or Keogh contributions, each one of which could be made after December 31, 2021).
If the actions you want to take can not be finished on the 31st or a single day, you ought to think about acting earlier than December 31st.
Throughout December, ask employees whose withholding allowances will be different in 2022 to complete a brand-new Form W4 or Form W4( SP).
If the month-to-month deposit rule applies, deposit the tax for payments in November.
If the month-to-month deposit rule applies, deposit the tax for payments in November.
The 4th installment of estimated tax for 2021 calendar year corporations is due.
If you as an employer postponed paying 2020 payroll taxes under the CARES Act provision, 50% of your share of the 2020 Social Security tax is due by December 31, 2021, and the rest is due by December 31, 2022. Any payments or deposits you make prior to December 31, 2021, are first applied against your payment due on December 31, 2021, and after that applied against your payment due on December 31, 2022.
If you are self-employed, December 31 is the last day to create a Keogh Retirement Account if you plan to make a 2021 contribution. If the institution where you plan to establish the account will not be open for business on the 31st, you will want to create the plan prior to the 31st. Keep in mind: there are other alternatives such as SEP plans that can be established after the close of the year. Please book a call with us to discuss your alternatives.
If the actions you want to take can not be finished on the 31st or a single day, you must think about acting earlier than December 31st.