In every country around the world, return filing is similar to an annual customary ritual for all taxpayers. Many of us need to comply with this ritual at the end of every tax year. As per the prescribed tax regulations, numerous taxpayers report their income and tax liabilities through tax returns.
In the United States, taxpayers need to follow the filing demands of the IRS. Taxpayers are categorized into various entities such as corporations, LLCs, partnership firms, cooperatives, and individuals in the US. Every category of tax entities has a separate set of tax filing regulations.
Individual entities, including individual taxpayers, green card holders, and non-resident persons have pre-determined tax obligations. They have to provide tax returns and forms as per their limits and sources of income. These myriad returns and forms have to be filed with regard to the pre-specified due dates.
Here, we are going to throw some light on the tax obligations of individual taxpayers in the United States. You will get to know about the upcoming tax filing requirements for the US individuals in October 2020.
Conditions for Individuals who need to a file Income Tax Return in the US
Not all individuals in the US have to report their income with a tax return. The individuals, whose gross earnings fall beyond the threshold limits set by the IRS, have to follow the return filing compliance. IRS revises the threshold limits almost every year to adjust the inflation rates. One must know about the four determining factors to know whether an individual is required to file a tax return. They include:
An individual may have to follow with the tax filing regulation even when he does not fall in the threshold limits as per the above conditions. A person who has to pay special taxes will have to submit a tax return. They cover taxes such as the Alternate Minimum Tax or Additional Taxes on Specific Retirement Plans.
General Deadline for Personal Income Tax Return
Usually, after the end of any financial year, individual taxpayers have to file their income tax returns on, or before April 15 of the succeeding year. However, the IRS has the power to extend these deadlines as and when the need arises.
Deadline Extensions in the US with the arrival of COVID-19 Infection!
Due to the COVID-19 outbreak in 2020, the IRS had to defer the tax return filing time limits as a relief measure. Almost all tax due dates have got extended in the wake of the lockdown measures introduced in the month of April 2020. The Internal Revenue came up with the Coronavirus Tax Relief and Economic Impact Payment Scheme for Individuals in the USA.
Initially, the tax filing due dates was shifted further from April 15 to July 15, 2020. This was the amended deadline for all tax filer individuals to provide their personal income tax returns across the country.
However, 2020 held further disastrous events in store for us that adversely impacted many US citizens. For the US citizens who were affected due to Hurricane Laura, the tax filing deadline had been further deferred from July 15 to October 15. In certain counties, that witnessed difficulties due to the Californian fires, the dates have got extended to December 2020.
One must remember the fact that the postponement of the due dates is only for the tax filing requirement. The due date for payment of your tax liabilities was July 15, 2020.
Important Due dates arriving in October 2020!
The month of October is almost about to begin. Mark your calendar for the following important due dates. These due dates are relevant for filing income tax returns and tax forms of distinct individual taxpayers.
October 13, 2020
It is the last date for all those individuals who earn income in the form of tips. All employees, who receive tips equal to or above $20 in a calendar month, have to report the sum of receipts to their employer. October 13 is the last date for employees to report their tips to their employers related to the month of September. The employer will use the reported sum for tax withholding and FICA tax estimations of the employees.
What are FICA taxes?
The Federal Insurance Contribution Act Taxes, popularly called the FICA taxes, are a mandatory payroll deduction. These sums are withdrawn from employee payments for contributing to social security retirement and health benefits of aged Americans.
October 15, 2020
What is Form 1040?
IRS has provided form 1040 for reporting all personal federal income details for residents of the United States. It showcases the total taxable income along with the amount of tax liability or refund due if any.
What is the relevance of Form FinCEN 114?
As per the Treasury Department’s Financial Crimes and Enforcement Network (FinCEN), an individual is required to file annually FinCEN 114 if he owns a personally or jointly reportable foreign financial account. A taxpayer will also need to file an FBAR (Foreign Bank and Financial Accounts Report) electronically if the aggregate value of the foreign account exceeds $10,000.
What are the SEP-IRA and the Keogh Retirement Plans?
Self-employed individuals and small business owners can use the two plans to reduce their tax liabilities. The SEP-IRA or the Simplified Employee Plan is available to the individual taxpayers and small business entities including LLCs and Corporations. The Keogh or HR 10 plan is a retirement plan for only self-employed individuals or proprietors. These plans offer compounded annual returns on the invested funds and act as a tax-free asset until final distribution.
Consequences if you miss the stated Deadlines!
Any individual who does not comply with the due dates for filing the return will have to incur a financial penalty. It is important to duly pay your tax liability and file the income tax returns to avoid interest and late fees. One can easily pay his tax liability online and file his income tax return electronically with the IRS. So, do not delay your tax compliance obligations.
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