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Partnership and Corporation Tax Tips and Reminders for Second Half of 2016

Partnership and Corporation Tax Tips and Reminders for Second Half of 2016 - TaxAct Blog

It’s hard to believe, but the year is almost half over already. If you have a partnership or corporation, here’s what you need to know to keep up with the Internal Revenue Service (IRS) while you work toward your business success for 2016.

Corporations

Post these dates on your calendar if you are responsible for a corporation that uses a calendar year.

June 15, 2016 – Second estimated quarterly income tax payment

Your estimated income tax payment for the second quarter of 2016 is due on June 15. You must generally make estimated tax payments if you expect to owe $500 or more, or you may owe penalties and interest in addition to any tax.

To make this payment, you can mail a check, use a credit or debit card, or use the IRS online using the Electronic Federal Tax Payment System (EFTPS).

If you choose to mail a check, be sure to have the envelope postmarked by the due date. You can use a credit or debit card up to the last day, but be aware you’ll pay extra fees for the convenience.

Corporations generally must make deposits by electronic funds transfer, using EFTPS. If you make a deposit any other way, and you do not meet an exception, you could be liable for a substantial penalty.

If this is your first time using EFTPS, be sure to allow time to register and receive your PIN from the IRS. You can no longer use federal tax deposit coupons to make federal tax deposits.

To determine the amount of corporate income tax to deposit, you can use Form 1120-W, Estimated Tax for Corporations. You generally pay 25 percent of your expected corporate tax for the year, or 25 percent of your tax for the previous year, whichever is less.

You can only use the amount from the previous year to calculate your estimated tax if you filed a 12-month corporate return for the previous year and the return showed a positive tax liability.

For corporations with seasonal or fluctuating income, you may choose to use the annualized income installment method or the adjusted seasonal installment method.

September 15, 2016 – 2015 tax return due if you filed an extension

If you requested a six-month extension last March to prepare your 2015 calendar year corporate tax return, be sure to file by September 15, 2016.

If you estimated your tax correctly when you filed the extension, you should owe little or no tax when you file your Form 1120 return.

If you owe more tax than you expected, however, you may owe tax, plus interest and penalties. In that case, try to file and pay before the due date, if possible.

The sooner you pay, the less interest and penalties you’ll owe.

September 15, 2016 – Third estimated quarterly income tax payment

Your third estimated income tax payment for 2016 is due on September 15.

To determine the amount of corporate income tax to deposit, use Form 1120-W, Estimated Tax for Corporations.

December 15, 2016 – Fourth estimated quarterly income tax payment

Your fourth estimated income tax payment for 2016 is due on December 15.

To determine the amount of corporate income tax to deposit, use Form 1120-W, Estimated Tax for Corporations.

Partnerships

Remember these dates if you are responsible for a partnership.

September 15, 2016 – 2015 tax return due if you were given an extension

If you were given an additional five-month extension of time to file your 2015 calendar return, now’s the time to finish the last details on your return and file Form 1065. Be sure to provide each partner with a copy of Schedule K-1 (Form 1065) or a substitute Schedule K-1.

October 17, 2016 – 2015 tax return due for electing large partnerships

If you were given an additional six-month extension for your electing large partnership, file a 2015 calendar year return (Form 1065-B) now. Provide each partner with a copy of Schedule K-1 (Form 1065) or a substitute Schedule K-1.

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About Sally Herigstad

Sally Herigstad is a certified public accountant and personal finance columnist and author of Help! I Can't Pay My Bills, Surviving a Financial Crisis (St. Martin's Griffin). She writes regularly at CreditCards.com, Bankrate.com, Interest.com, RedPlum, and MSN Money. She is an experienced speaker and a member of Toastmasters International. Follow Sally on Twitter.