Tax TimeThis is an important time of year for every business – small to large. Quarterly tax returns are due, individual income tax returns on extension are due, and the end of the calendar year is fast approaching. Since we constantly receive inquiries into the whats and whens of tax due dates, we thought we’d provide an overview of what to expect over the next few months…

Quarterly Payroll Taxes. Quarterly payroll taxes are due on October 31, 2012. These taxes cover the employer’s portion of the required payroll taxes and are an added expense over and above the expense of an employee’s gross pay. They include social security taxes (6.2% up to the annual maximum), Medicare taxes (1.45% of wages), Federal unemployment taxes (FUTA), and State unemployment taxes (SUTA). Payment of your small business’ quarterly payroll taxes includes completion of Form 941 and making the according payment from line 14 of the form.

Personal Income Taxes. Individuals who filed for an extension for the personal income taxes in April must complete and submit their 2011 annual return by October 15, 2012. These taxes cover the individual amount calculated and due to the government as a result of completing Form 1040/1040A/1040EZ. Note that you must also include and reference all W-2s, 1099s and other supporting documents to ensure compliance with all tax codes and requirements.

Speaking of W-2s and 1099s, we advise all of our clients to start considering and preparing for the completion and distribution of these documents (having all I9, W4, state tax/federal tax withholding certificates and updated insurance certificates) during the month of October.

The W-2 tax form is prepared and provided to individual employees to track the wages, tips and compensation that they received from your business. It also tracks the amount of federal/state income tax, social security tax, medicare tax, etc. that is withheld by the company on their behalf.

The 1099 tax form is prepared and provided to individual contractors to whom you paid more than $600 during the previous tax year. It is used to track all non-employee compensation and any federal/state taxes withheld.

Both the W-2 and the 1099 must be distributed to employees and contractors respectively by no later than January 31, 2013 (unless an extension to February 15, 2013 is requested). Not only is it important to meet these deadlines for legal reasons, but it is also a good representation of how organized and capable your accounting department is as people appreciate receiving this information sooner rather than later.

While it may seem like a lot of information to keep track of, having a solid accounting/bookkeeping team makes compliance a no-brainer. Contact Lescault and Walderman today, 866-242-2042, if you have any questions about the tax process or pending deadlines for your business.

Resources: –

MD:http://business.marylandtaxes.com/taxinfo/duedates/default.asp
IRS: http://www.irs.gov/publications/p509/ar02.html