Monthly Bulletin
Date March 2022 | Issue 2022.3
Meet our New Staff
We have three new staff members that joined our firm this year. Let me introduce them (left to right):

Brenda Witherspoon - Accountant
Lindsay Smithson - Accountant
Krystal Fricke - Administrative Assistant.
Upcoming Due Dates

March 15            
  • Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in February.
  • Employers – Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in February.
  • Partnerships – File a 2021 calendar year income tax return (Form 1065). Provide each partner with a copy of their Schedule K-1 (Form 1065-B) or substitute Schedule K-1. To request an automatic 6-month extension of time to file the return, file Form 7004. Then file the return and provide each partner with a copy of their final or amended (if required) Schedule K­1 (Form 1065) by September 15.
  • S Corporations – File a 2021 calendar year income tax return (Form 1120S) and pay any tax due. Provide each shareholder with a copy of Schedule K-1 (Form 1120S), Shareholder’s Share of Income, Credits, Deductions, etc., or a substitute Schedule K-1. If you want an automatic 6-month extension of time to file the return, file Form 7004 and deposit what you estimate you owe in tax. Then file the return, pay any tax, interest, and penalties due and provide each shareholder with a copy of their Schedule K-1 by September 15.
  • S corporation election – File Form 2553, Election by a Small Business Corporation, to choose to be treated as an S corporation beginning with calendar year 2022. If Form 2553 is filed late, S corporation treatment will begin with calendar year 2023.

March 31
  • Electronic Filing of Forms – File Forms 1097, 1098, 1099 (except Form 1099-NEC), 3921, 3922, and W-2G with the IRS. This due date applies only if you file electronically. The due date for giving the recipient these forms generally remains January 31.
  • Electronic Filing of Form W-2G – File copies of all the Form W-2G (Certain Gambling Winnings) you issued for 2021. This due date applies only if you electronically file. The due date for giving the recipient these forms remains January 31.
  • Electronic Filing of Forms 8027 – File copies of all the Forms 8027 you issued for 2021. This due date applies only if you electronically file.
  • Electronic Filing of Forms 1094-C and 1095-C and Forms 1094-B and 1095-B – If you’re an Applicable Large Employer, file electronic forms 1094-C and 1095-C with the IRS. For all other providers of minimum essential coverage, file electronic Forms 1094-B and 1095-B with the IRS.
April 11
  • Employees – who work for tips. If you received $20 or more in tips during March, report them to your employer. You can use Form 4070.

April 18
  • Individuals – File an income tax return for 2021 (Form 1040 or Form 1040-SR) and pay any tax due. If you live in Maine or Massachusetts, you may file by April 19. If you want an automatic 6-month extension of time to file the return, file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return and pay what you estimate you owe in tax to avoid penalties and interest. Then file Form 1040 or Form 1040-SR by October 17.
  • Household Employers – If you paid cash wages of $2,300 or more in 2021 to a household employee, file Schedule H (Form 1040 or Form 1040-SR) with your income tax return and report any employment taxes. Report any federal unemployment (FUTA) tax on Schedule H (Form 1040 or Form 1040-SR) if you paid total cash wages of $1,000 or more in any calendar quarter of 2020 or 2021 to household employees.
  • Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in March.
  • Employers – Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in March.
  • Individuals – If you are not paying your 2022 income tax through withholding (or will not pay in enough tax during the year that way), pay the first installment of your 2022 estimated tax. Use Form 1040-ES.
  • Corporations – File a 2021 calendar year income tax return (Form 1120) and pay any tax due. If you want an automatic 6-month extension of time to file the return, file Form 7004 and deposit what you estimate you owe in taxes.
  • Corporations – Deposit the first installment of estimated income tax for 2022. A worksheet, Form 1120-W, is available to help you estimate your tax for the year.
IRA – SEP – how to lower your 2021 tax bill
A SEP IRA is an IRA that is designed for small business owners with one or more employees or individuals who earn income from being self-employed. The IRA is a tax deferred account which means you receive a tax deduction for the contribution you make to it. Thus, you don’t pay taxes on your contributions until you withdraw the money from your account. The contributions made to a SEP IRA are made by the employer. The SEP IRA is great for business owners who work as sole proprietors or possibly as an LLC. If your business has employees, you will likely be required to contribute the same percentage of income to the employees as you give to yourself. A last minute SEP IRA can be a significant tax deduction for small business owners.
 
One of the main advantages of a SEP IRA is the higher contribution limits. Business owners are permitted to contribute the lesser of 25% of income per qualified employee, or $58,000 for 2021. Additionally, the SEP IRA can be set up and funded after the tax year has ended and until you file your taxes for the previous year (including extensions). 
Qualified Charitable Distribution (QDC) - for 2022
If you are age 72 or older, the IRS requires you to take a minimum distribution each year from your tax deferred retirement accounts. If this is you, then you may want to consider a qualified charitable distribution (QCD). Since the IRS has increased the standard deduction in recent years, the amount of individuals who itemize their deductions has significantly decreased. The qualified charitable distribution allows you to continue to make your charitable contributions while also receiving the tax benefits of those contributions. A QCD is a direct transfer of funds from your IRA paid directly to the charitable organization. The maximum allowable QCD for the year is $100,000. The QCD is excluded from your taxable income thus providing you with the tax benefits of making the contributions. Additionally, the amount that you utilize as a QCD is counted towards the required minimum distribution that you must take each year. 
 
The rules for a QCD are as follows:
 
  1. You must be 72 years old at the time you request a QCD
  2. For a QCD to count towards your current year required minimum distribution, the funds must be distributed prior to the required minimum distribution deadline
  3. Funds must be transferred directly from your IRA to the qualified charity
  4. The maximum annual distribution amount that can qualify for a QCD is $100,000