Ep. 116 | Taxpayer Timeline Explained

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Welcome back to the teaching tax flow podcast. We are here. We are at the end of 2024. So as we go into a new year, we picked a great topic from our teaching tax flow community, and that is called the taxpayer timeline. So we’re gonna go through this, Chris and myself, diving into some details.

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But more importantly, you’re gonna leave this episode way smarter than you came into it So before we jump into the topic today, let’s do take a brief moment and thank our episode sponsor. This podcast is sponsored by The Mortgage Shop. Are you looking to qualify for an investment credit loan without jumping through hoops? That’s easy. They have loans with LTV up to 89.99%.

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Hey, everybody. Welcome back. The very last podcast of 2024.

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We’re here. We did it. We survived another year. God, we are we are cranking through these things. Chris, I can’t believe we’ve just done a 100 and what?

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13, 114, 150 of these things, and I think we have more and more fun as we go along. So, you know, I gotta say it because I haven’t sent a few episodes. Welcome back to your own show, sir. How are you?

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Thank you. It feels good, and we have, we are closing out 2024 here today. You might be listening to this in 2025. We don’t know. Maybe you’ll listen in 24.

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And happy New Year or happy New Year coming up. Damn. I’m had a great year here on the teaching tax flow podcast. Hard to believe we’re in episode, what, 118, 120, somewhere in that range. And I think we’re getting we’re picking up even more momentum, and we’re so fortunate to to have all the guests and all the people in our community.

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And since it’s the last day of the year, I thought it’d be a good idea for us to kinda to to walk through the calendar year for a taxpayer. Because you hear there’s so many dates going on in the tax preparation or tax world. And the so I wanna walk through the key dates for taxpayers or small business owners for them to remember. And there’s especially a an interesting wrinkle with federal quarterly estimated tax payments

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too. And we did a great show just on that one specifically, and I’ll I’ll kinda set the, we’ll say set the groundwork, I guess, a little bit for this one. So we’re gonna power through these things. We’re we know it’s the end of the year. You’ve got great things to do.

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And, frankly, who wants to look forward past January 1st at this moment? So even if Kirsty mentioned, even if you’re listening to this afterwards, we got some great dates. And believe it or not, I’ll put this out there. There’s probably a lot more important dates on this for anybody that’s listening. Almost bet you don’t know them unless you’re a tax pro.

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If you’re already a tax pro, you cannot cheat and say that you know them because this is your job. If you don’t know them, go back to school. But I I do wanna throw one thing out, Chris, and then I’ll I’ll hand the mic over to you and let you run with this thing like, like you’re in a relay race. But I feel like we as taxpayers have been so conditioned that there’s one date in the entire year called tax day. Right?

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And and we kinda tend to forget about all this other stuff and, you know, it could it could really get you. They can catch up to you. So let let’s run through these things

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at the top and oh,

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I know what you’re gonna say.

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Accusation, though. I’m gonna make an accusation that you wanna, 1, get under my skin by calling it tax day. In order you want and you you wanna focus on that day because that’s your birthday.

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It is. It you know what I do appreciate, though? I do really appreciate the fact that the IRS kinda moved it off of that a little bit. Right? Because was it 23 and 24?

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It wasn’t on 15th. They moved it, like, 17th, or it’s like the next business day. Right?

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All of the dates we’re gonna discuss today are are movable if it falls on a weekend or if there is a holiday on that day. So for instance, where there’s a date in January that sometimes Martin Luther King Day. Your dates your birthday sometimes falls on what’s called emancipation day. So if there’s a federal holiday or a weekend, the it’ll the the due date will bump to the next business day. Also, there are certain situations when you’re in a disaster recovery area that due dates could get moved.

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So let’s say you’re in an area that was hit by hurricane or a tornado. The what we’re trying to talk through today are the the standard dates for a taxpayer. There are always exceptions to these rules.

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Well, we know we know the IRS listens to this. In fact, I real I’m not joking all things aside actually due to one person who is is an amazing human being. Works for the tax is it the tax advocacy?

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Prosper advocacy service.

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That’s it. She actually listens to this, which I appreciate. I won’t I will not say your name or the location you’re in, but I know you listen to it because you tell me this. Maybe we can throw this up the chain because you opened the door up when you said if it falls on a holiday. Well, isn’t my birthday every year a holiday?

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So what why in the world do they

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I know.

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Try to stick with this date, man? These guys are delusional. Right? They’re forgetting that.

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I don’t know, John, but I think we should talk to your friend to get her get get her on the podcast.

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She’s probably afraid to get that conversation with I think anybody that’s tied to the government is probably terrified of us.

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Oh, we’re more or

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less me. You’re you’re reserved and, again, you bring the brains to it. I think it’s me and not having a filter or not knowing what I’m talking about half the time, which is why you’re here is is what makes it fun, but that’s all good.

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Let’s jump into these dates. We’re gonna start chronologically. Right? So it’s New Year’s Eve right now. You’re again, you’re going to listen to this probably in 2025.

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Hopefully, you find yourself happy and healthy, and we find ourselves in the middle of January with the first date, January 15th, which is close to my birthday, John. Couple things are, that due that day. The the well, one major thing is due that day. And this is kind this is where things get a little, tough to comprehend. Your 4th quarter federal estimated tax payment from the year before is due in j on January 15th.

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So by your 4th quarter estimated tax payment is due for 2024 is due January 15, 2025, which makes sense. Right? Because until the year ends, you might not know what your exact business profit is, what your income is, and how much your estimated tax payment should be. So January 15th, 4th quarter estimated tax payment due date for the previous year. Now the next major date applies to s corporations and partnerships.

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Remember, s corporations file a form 11 20 s, and then entities that file as a partnership could be a a general partnership, a limited partnership, or a limited liability company with more than one member. Multi member LLCs, those are your common entities that file as a partnership. That due date is really tricky. It’s March 15th. And if you don’t file on time, and there’s an approximately $200 per partner or per s corp shareholder per month penalty for not filing on time.

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I would say in our private practice, the vast majority of s corps and partnership returns do not file by March 15th. However, you can easily get a 6 month extension by filing a form 7004. So a lot of times people that are new with that have an s corporation and they’re new to it, they think that the s corp is due on April 15th with their personal return. And I can’t tell you how many times they’ve missed and and got a letter from the IRS penalizing them. So March 15th, s corp and partnership due date.

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And that makes sense. Right? Because those entities are creating k ones that report each shareholder or each member or each partner’s share of the income deductions and credits. We need to have those before we can prepare a personal return. So they can’t be due on the same date, or so you would just have a big problem.

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And, actually, I know our last episode was, you know, gifts from the IRS. You know, we we don’t have to dive into all the extensions, but that’s a pretty significant gift to s corps and partnerships as a 6 months extension. But the trick with that is, right, is you actually have to file the extension before the due date. Right?

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Absolutely. So, yes, yeah, you gotta file the extension. So March 15th, s corps partnership returns. Now the next date, the aforementioned Johnny Chipolski birthday.

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Birthday. Oh,

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boy. Hey. Don’t quit your day job. Oh, I’m not gonna work. I gotta I gotta whenever my daughter sings just to get under her skin, and I tell her, I’m so happy you’re in theater.

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I mean, some people in theater sing, but not in our family. April 15th. This is the this is the date that has the most amount of items associated with it. One is the individual tax return deadline. Okay?

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Now, again, remember, you can just get a tax extension if you would like by filing a form for 4868 or filing 1 online, but in which gives you an extra 6 months, but that is the individual tax return due date for the previous year. 2, it’s also the due date of your Q1 estimated tax payment. So April 15, 2025 will be the whatever your profit was or income between March, January, and March, if you have to pay estimated tax payments, that’s the due date of the estimated tax payment. Now typically so so do you have both of those things due on the same day? It’s also the due date for IRA contributions from the previous year and health savings account contributions for for the previous year.

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If you owe tax, this is the due date for the tax you owe even if you file an extension. And c corporations, the due date for those returns are April 15th. Now when I first started in this business, c corps are due in March, and partnerships are due in April, and those got switched, which was which was smart. With the c corporation, you can easily get a 6 month extension as well. You just have to request it.

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So individual return, Q1 estimate, c corp due date, IRA and HSA contribution deadline, those cannot be extended. And then, payment with a of any tax due from the previous year. So lots going on on April 15th, not just your birthday, John.

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It happens. You know? But but, another little bonus from the IRS too is if, if you don’t happen to have any checks laying around, just a a little reminder, we talked about this in previous episodes, you can make all these payments online. You know, direct on on the IRS’s website. It’s like a very easy thing to do.

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So you don’t have to worry about postmark and all that.

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IRS dotgov, I believe. You know, we I mean, I have an account that I I make, payments right directly to the IRS, and it just makes life a little easier. Now things get tricky on these personal estimated tax payments. Right? Because you think they’re quarterly.

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The Q1 is due in in April. For this is probably the most missed. The next two things are the most missed. The second quarter payment for individuals is June 15th. You’re thinking, shouldn’t it be July?

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I know, but it’s June. So June 15th so you’re gonna pay tax in the Q2 for whatever your income or profit was for just April and May. Usually, you’re but the the second quarterly second federal quarterly estimate of tax payment is due June 15th, not July 15th, so be very aware of that. The 3rd quarterly payment, you’re thinking logically, you would think, oh, that’s due October 15th. Right?

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No. That’s due September 15th. I know it’s very odd, but do you mean do you

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mean the government doesn’t have everything in a very organized, you know, makes sense plan? Shocking.

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I know. It’s a little nutty. So September 15th is gonna be your 3rd quarterly payment due date, and it’s also the filing deadline for any of your s corporation or partnership returns that file an extension. So September 15th is a huge day for tax professionals and business owners. October 15th is even a bigger day in some way ways.

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That’s the filing deadline for any of the tax returns, personal returns that are on extension and c corp returns on extension. So September 15th October 15th, very, very important days in the tax preparation world. So for October 15th, final deadline for extended personal returns and extended c corporation tax returns. Now you might think, oh, it’s December 31st. Anything going on today?

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Well, sure. It’s the, last day of the year, but it’s also the final day for making RMDs. So if your taxpayers that are mature aged, they see 73 or older, that are required to take money out of their their retirement accounts. That’s why it’s called the required minimum distribution. Or if someone that has inherited an IRA or retirement account, this is the final day to take those distributions.

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And the penalty for not taking those distributions, it did go down a little bit from 20 50% to 25% is still significant. And then, obviously, this is the last day to implementing type of tax. Last second tax planning opportunities. The most popular one’s gonna be your tax loss harvesting. So if you have capital losses in your brokerage accounts and you’re trying to sell, you you’ve got till today.

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Or if you’re making charitable contributions, you know, today is your final day to get those in before the end of the year. Make sure those are postmarked if you’re mailing them or it’s just easy to make the contribution electronically.

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You know, it was I think last year around this time, I I made the same joke, and I don’t know why this just clicked with me. But you know, we didn’t use the example of actually, in this episode or even for the past couple months, I don’t think I pulled the example out, you know, of, oh, well, I’m at the bar. It’s 11:55 PM on 31st. What can I still do? You know what I mean?

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I don’t know if you remember that from last year. I think I I think I said it too much and I’ll that it just you know, it it became like my own personal brand was clearly everybody thinks I’m at the bar drinking at 11:59 when you have a toddler at home and you actually go to sleep about 9 and you play last year’s replay, and so they think they’ve seen it, or the ball drop. But this was awesome, man. I’m I’m glad we ran through these, because we get asked these a lot. And, you know, we’ll I’ll go ahead and I’ll make sure that our team posts these dates in the show notes as well.

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It’ll be pretty lengthy. So depending on what device you’re looking at, you know, might not show up exactly correct. But, again, they’re they’re variable dates for the most part. You know, because you mentioned the holidays, etcetera on there, it’s next business day. Just mark your calendar.

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And and what I did, I don’t know if it’s helpful for everybody else’s, actually go in your calendar and, you know, technology is a beautiful thing. Just set it to recur annually with a reminder, like, 7 days or 20 days before, and then you know if that date changes. It’s a very easy thing to do because as we know, we all got so much stuff going on. We’ll tend to forget some of these. Right?

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Very smart. Happy New Year. Thank you for listening to the podcast. We’re so excited about this year coming up, and, yeah, we gave it we we you know what? We did a little bit shorter podcast this this this week because we want you to spend more time with your family.

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Absolutely. And as we’ve mentioned in the New Year, we didn’t actually talk about this for a while, but this has been in the works for a couple years, really based off of people asking us for something. You know, we’re we’re basically in the business of providing information and resources, and that being so, if if anybody listening to this is actually looking for a tax professional, we made it a we made a great domain name. Very easy to find. It’s just 2025.tax.

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So 2025.tax. We actually are are gonna start offering a service here in a couple days. So get on get on that list. You can really tap into the resources through teaching tax flow as well as, you know, Chris’ private practice and other ones too. So, basically, what it is in a nutshell is we’re offering some some direct, tax prep services and and strategy and planning.

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So it’s something to definitely take advantage of. There you fill out this form. It’s very quick, very easy, very short for the most part, and it’s nonbinding. So even if you wonder if this is good for you, fill it out, talk to our team, figure it out, and go from there. But even more important than that, can definitely not close out on a pitch of what we’re doing.

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This is about you, not us. Have a good night. Have a good day. Have a great rest of the year as it winds down, and let’s get into 2025. And to close it out, you know, I normally say the same thing over and over again.

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I’m just gonna say we’ll see you guys next year. So thank you so much for everybody joining us here on the Teaching Tax Flow podcast.

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