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September 2023 Individual Due Dates
September 1 - 2023 Fall and 2024 Tax Planning Contact this office to schedule a consultation appointment. September 11 - Report Tips to Employer If you are an employee who works for tips and received more than $20 in tips during August, you must report them to your employer on IRS Form 4070 no later than September 11. Your employer must withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 8 of your W-2 for the year. You must pay the uncollected withholding when your return for the year is filed. September 16 - Estimated Tax Payment Due The third installment of 2023 individual estimated taxes is due. Our tax system is a “pay-as-you-earn” system. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the “pay-as-you-earn” requirement. These include:
Payroll withholding for employees;
Pension withholding for retirees; and
Estimated tax payments for self-employed individuals and those with other sources of income not covered by withholding.
Taxpayers who fail to prepay a safe harbor (minimum) amount can be subject to the underpayment penalty. This penalty is equal to the federal short-term rate plus 3 percentage points, and the penalty is computed on a quarter-by-quarter basis.
Federal tax law does provide ways to avoid the underpayment penalty. No penalty is assessed if the underpayment is less than $1,000 (the de minimis amount). In addition, the law provides "safe harbor" prepayments. There are two safe harbors:
The first safe harbor is based on the tax owed in the current year. If your payments equal or exceed 90% of what is owed in the current year, you can escape a penalty.
The second safe harbor is based on the tax owed immediately preceding the tax year. This safe harbor is generally 100% of the prior year’s tax liability. However, for taxpayers whose AGI exceeds $150,000 ($75,000 for married taxpayers filing separately), the prior year’s safe harbor is 110%.
Example: Suppose your tax for the year is $10,000, and your prepayments total $5,600. The result is that you owe an additional $4,400 on your tax return. To determine if you owe a penalty, see if you meet the first safe harbor exception. Since 90% of $10,000 is $9,000, your prepayments fell short of the mark. You can't avoid the penalty under this exception.
However, in the above example, the safe harbor may still apply. Assume your prior year’s tax was $5,000. Since you prepaid $5,600, which is greater than 110% of the prior year’s tax (110% = $5,500), you qualify for this safe harbor and can escape the penalty.
This example underscores the importance of ensuring your prepayments are adequate, especially if you have a large increase in income. This is common when there is a large gain from the sale of stocks and property, when large bonuses are paid, when a taxpayer retires, etc. Timely payment of each required estimated tax installment is also a requirement to meet the safe harbor exception to the penalty. If you have questions regarding your safe harbor estimates, please call this office immediately.
CAUTION: Some state de minimis amounts and safe harbor estimate rules differ from those for the Federal estimates. Please call this office for particular state safe harbor rules. Weekends & Holidays:
If a due date falls on a Saturday, Sunday, or legal holiday, the due date is automatically extended until the next business day, which is not a legal holiday.
Disaster Area Extensions: Please note that due dates will be extended when a geographical area is designated as a disaster area. For more information on whether an area has been designated a disaster area and the filing extension dates, visit the following websites:
FEMA: https://www.fema.gov/disaster/declarations IRS: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations For example, disaster-area taxpayers in most of California and parts of Alabama and Georgia now have until Oct. 16, 2023, to file various federal individual and business tax returns and make tax payments.
September 2023 Business Due Dates
September 15 - S Corporations File a 2022 calendar year income tax return (Form 1120-S) and pay any tax due. This due date applies only if you requested an automatic 6-month extension. Provide each shareholder with a copy of their Schedule K-1 (Form 1120-S) or a substitute Schedule K-1 and, if applicable, Schedule K-3 (Form 1120-S) or substitute Schedule K-3 (Form 1120-S).
September 15 - Corporations
Deposit the third installment of estimated income tax for 2023 for the calendar year.
September 15 - Social Security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in August.
September 15 - Nonpayroll Withholding
If the monthly deposit rule applies, deposit the tax for payments in August.
September 15 - Partnerships
File a 2022 calendar year return (Form 1065). This due date applies only if you were given a 6-month extension. Provide each partner with a copy of their Schedule K-1 (Form 1065) or a substitute Schedule K-1 and, if applicable, Schedule K-3 (Form 1065) or substitute Schedule K-3 (Form 1065). Weekends & Holidays:
If a due date falls on a Saturday, Sunday, or legal holiday, the due date is automatically extended until the next business day, which is not a legal holiday.
Disaster Area Extensions: Please note that due dates will be extended when a geographical area is designated as a disaster area. For more information on whether an area has been designated a disaster area and the filing extension dates, visit the following websites:
FEMA: https://www.fema.gov/disaster/declarations IRS: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations For example, disaster-area taxpayers in most of California and parts of Alabama and Georgia now have until Oct. 16, 2023, to file various federal individual and business tax returns and make tax payments.