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Extend The Due Date To Pay Your Corporate Income Taxes – A Good Reminder From a Past Post

February 17, 2010 9:31 am / 2 Comments on Extend The Due Date To Pay Your Corporate Income Taxes – A Good Reminder From a Past Post

Now is a good time to remind corporations to conserve cash flow if possible.  If you expect to have a net operating loss in 2010 but have taxable income in 2009, here is an opportunity to extend the due date of  the amount due with your 2009 corporate tax return.  This is another good post from the past.
 
By Stacie Clifford Kitts, CPA
 

Do you have a profit in the current year, but because of certain economic conditions, or other factors you expect to have a net operating loss next year?

If the answer is yes, you may be able to delay payment of your corporate income taxes.

Yes – Really, you can delay payment of corporate income taxes if the right conditions exist.

Generally, if you request an extension of time to file your tax return, you are extending the due date of the return, but not the due date for paying your income tax. As corporate tax payers know, their income taxes are due in full by the 15th day of the third month following the corporation’s year-end.

However, you may be able to extend the due date for paying your corporate income taxes by filing Form 1138 Extension of Time for Payment of Taxes by a Corporation Expecting A Net Operating Loss Carry back.

In order to take advantage of this extension of time to pay your tax, you must also extend the due date of your corporate income tax return using Form 7004 Application for Automatic Extension of Time to File Certain Business Income Tax. Payment is delayed [and therefore not deposited with Form 7004] because taxes that normally would be deposited will be reduced or possibly eliminated by the carry back of the net operating loss from the following year.

File the Form 1138 after the beginning of the tax year where you expect a net operating loss, but before the original due date of the tax return.

The extension for payment is in effect until the return for which the extension is requested is due to be filed – including extensions.

Note: Not all payments are extended. If you were required to make estimated payments throughout the year, these will most likely not be extended. Only payments that would be due after you file Form 1138 are extended.

IRS Presents: Five New Things to Know About 2009 Taxes

February 17, 2010 7:06 am / Leave a comment

As you get ready to prepare your 2009 tax return, the Internal Revenue Service wants to make sure you have all the details about tax law changes that may impact your tax return.

Here are the top five changes that may show up on your 2009 return.

1. The American Recovery and Reinvestment Act

ARRA provides several tax provisions that affect tax year 2009 individual tax returns due April 15, 2010. The recovery law provides tax incentives for first-time homebuyers, people who purchased new cars, those that made their homes more energy efficient, parents and students paying for college, and people who received unemployment compensation.

2. IRA Deduction Expanded

You may be able to take an IRA deduction if you were covered by a retirement plan and your 2009 modified adjusted gross income is less than $65,000 or $109,000 if you are married filing a joint return.

3. Standard Deduction Increased for Most Taxpayers

The 2009 basic standard deductions all increased. They are:

  • $11,400 for married couples filing a joint return and qualifying widows and widowers
  • $5,700 for singles and married individuals filing separate returns
  • $8,350 for heads of household

Taxpayers can now claim an additional standard deduction based on the state or local sales or excise taxes paid on the purchase of most new motor vehicles purchased after February 16, 2009. You can also increase your standard deduction by the state or local real estate taxes paid during the year or net disaster losses suffered from a federally declared disaster.

4. 2009 Standard Mileage Rates

The standard mileage rates changed for 2009. The standard mileage rates for business use of a vehicle:

  • 55 cents per mile

The standard mileage rates for the cost of operating a vehicle for medical reasons or a deductible move:

  • 24 cents per mile

The standard mileage rate for using a car to provide services to charitable organizations remains at 14 cents per mile.

5. Kiddie Tax Change

The amount of taxable investment income a child can have without it being subject to tax at the parent’s rate has increased to $1,900 for 2009.

For more information about these and other changes for tax year 2009, visit IRS.gov.
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