Tax deadlines have long broken out of the mold of being exclusively set at April 15 for individuals and March 15 for businesses, generally with no important dates falling in between. From September through November of this year, recent tax legislation and IRS programs have created a handful of important new deadlines that may be easy to miss without a list. Some old dates, too, have a few new wrinkles.
Here is a checklist of upcoming deadlines, designed to alert you to opportunities or that are time sensitive. Please call our office immediately if you identify any deadline that may apply to your situation. We can help you avoid missing out on tax incentives or being subject to penalties if forms are not filed on time.
September 15/ October 15: NOL carryback deadline
The 2009 Recovery Act allows eligible small businesses (with average gross receipts of $15 million or less over three years) to elect a longer carryback period — up to five years — for 2008 losses. A small business that wants to take advantage of the three, four or five-year carryback period for 2008 losses must file an election with the IRS to use the longer period. Taxpayers can make the election on an original return (Forms 1040, 1041, 1065, and 1120) or an amended return (Forms 1040X, 1045, 1120X, or 1139).
Calendar year businesses. The filing deadline is September 15, 2009 for a corporation on the calendar year. The deadline is October 15, 2009 for an individual on the calendar year. The October 15 deadline includes a sole proprietor that qualifies as an eligible small business, an individual partner in a partnership that qualifies as an eligible small business and a shareholder in an S corporation that qualifies as an eligible small business.
Fiscal year businesses. A corporation on a fiscal year that ends March 31, 2009 must make the carryback election by December 15, 2009. An individual on a fiscal year ending March 31, 2009 could make the election by January 15, 2010.
September 15: Individual estimated tax payments due
Individuals who are required to make quarterly estimated tax payments must make payments on September 15. Failure to pay estimated tax in a timely manner may result in the IRS’s assessment of penalties.
Thanks to another temporary relief provision in the 2009 Recovery Act, estimated tax payments of “qualified individuals” for tax years beginning in 2009 may be based on 90 percent of the individual’s prior year’s tax liability (rather than the usual 100 percent amount). An individual is a qualified individual if the adjusted gross income shown on the individual’s return for the preceding tax year is less than $500,000 and more than 50 percent of the gross income shown on the return for the preceding tax year is from a business which employed fewer than 500 employees on average during the calendar year that ends with or within the preceding tax year of the individual.
September 23: FBAR reporting deadline
Taxpayers maintaining any type of financial account in a foreign country are required to report this information to the U.S. government. Taxpayers must used Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (known as the “FBAR”), if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year. While the deadline each year is usually June 30 of the following year, most taxpayers this year have been given an extension to complete and file the FBAR until September 23, 2009 (some with only “signature authority” have longer). Also under an IRS offshore compliance initiative, US taxpayers who disclose their secret bank accounts by September 23, 2009, will be given special consideration for leniency from criminal prosecution.
October 15: Due date for individual tax returns filed under an extension
Individuals have until October 15 to file their individual federal income tax return for 2008, Form 1040, if they are filing on an extension. Not only will missing this deadline mean incurring a failure to file penalty and interest, but certain valuable tax elections can be made only on a timely filed return.
October 15: Deadline for undoing Roth conversion
If you converted from a traditional IRA to a Roth IRA in 2008, but for one reason or another want to undo the conversion, you have until October 15, 2009 to do that as well. Especially if the value of your investments in your IRA has dropped significantly since you converted from a traditional IRA to a Roth IRA, you may want to reconvert and then convert again at the lower value. This can save you from paying income tax on the amount by which your converted account has decreased.
Moreover, if you made a contribution to a traditional IRA or Roth IRA in 2008, but since determined that you should have contributed the money to the other type of account, you still can. If you act before October 15, 2009 you can recharacterize your IRA contribution.
Undoing your Roth IRA conversion, or a contribution to either account, must be made before October 15, 2009, and only if you have filed your 2008 return by April 15, 2009 (or, if you obtained a filing extension, by that extension due date). If you already filed your 2008 return, you will need to file an amended return for 2008.
November 26, 2009: Cancellation of indebtedness income deferral election
The 2009 Recovery Act gives businesses an election to defer cancellation of indebtedness income (COI) from the “reacquisition” or repurchase of debt in 2009 or 2010. The income is deferred until 2014 and only then must be reported ratably over five years, through 2018. An election will be treated by the IRS as effective if the taxpayer files an election with the taxpayer’s federal income tax return filed on or before September 16, 2009. However, an election that does not comply with section 4 of Rev. Proc. 2009-37 (involving election procedures) will not be effective unless the taxpayer on or before November 16, 2009, files an amended return for the taxable year of the election.
A taxpayer who filed an election by the original September 16, 2009 deadline can modify the election (for instance, to change the amount deferred) by filing an amended return by November 16, 2009 with a revised election.
November 30, 2009: First-time homebuyer tax credit
The deadline for being entitled to the first-time homebuyer tax credit is fast approaching. The credit sunsets after November 30, 2009. The 2009 Recovery Act raised the maximum credit to $8,000 for 2009. Individuals have until November 30, 2009 to make a first-time home purchase that qualifies for the $8,000 credit. A “purchase” for this purpose takes place when title closes (that is, at the “closing”) and not when the contract of sale is signed. The credit is claimed on Form 5405, First-Time Homebuyer Credit.