It’s a new year and time to get down to the nuts-and-bolts of tax season. Best advice? IRS spokesperson Dee Harris Stepter said, “Of course, what everyone should be doing is getting their records together so they can be ready to file.”
The IRS will begin accepting 2013 business tax returns on Jan. 13. That goes for both electronically-filed and paper-filed returns filed by corporations, S corporations and partnerships, among others.
However, the IRS said, the Jan. 13 start date does not apply to unincorporated small businesses that report their income on Form 1040. The start date this year for all 1040 filers is Jan. 31. The IRS encourages these small businesses to begin preparing their returns now, but said it will not be able to accept these or any other individual returns or begin processing them until Jan. 31. This includes sole proprietors who file a Schedule C, landlords who file a Schedule E and farmers who file a Schedule F.
The new opening date of Jan. 31 gives the IRS time to program and test its tax processing systems. The annual update was delayed in October following the 16-day federal government closure.
“Our teams have been working hard throughout the fall to prepare for the upcoming tax season,” IRS Acting Commissioner Danny Werfel said. “The late January opening gives us enough time to get things right with our programming, testing and systems validation. It’s a complex process, and our bottom-line goal is to provide a smooth filing and refund process for the nation’s taxpayers.”
The government shutdown caused the IRS to change the original opening date from Jan. 21 to Jan. 31. The 2014 date is one day later than the 2013 filing season opening, which started on Jan. 30, 2013, following extensive tax law changes made by Congress on Jan. 1 under the American Taxpayer Relief Act.
New year-end tax planning information was recently added to IRS.gov to help taxpayer prepare for the 2014 tax season and receive their refunds “as easily as possible.”
The IRS emphasized that it will not process any tax returns before Jan. 31 and urged taxpayers to use e-file or Free File with the direct deposit option to receive their tax refunds much faster.
Also, the IRS said, many software companies are expected to begin accepting tax returns in January and hold those returns until the IRS systems open on Jan. 31. The IRS promised more details in January.
Stepter said the IRS Small Business Tax Guide (Publication 334) hasn’t been updated yet for 2014 but the 2013 version to file 2012 tax returns is available at www.irs.gov/publications/
Here’s some of what’s new for 2013:
» Tax rates: For tax years beginning in 2013, the social security part of the self-employment tax increases to 12.4 percent and the Medicare part of the tax remains at 2.9 percent. As a result, the self-employment tax is 15.3 percent.
» Maximum net earnings: The maximum net self-employment earnings subject to the social security part of the self-employment tax increases to $113,700 for 2013. There is no maximum limit on earnings subject to the Medicare part.
» Standard mileage rate: For 2013, the standard mileage rate for the cost of operating your car, van, pickup or panel truck for each mile of business use is 56.5 cents per mile.
» Simplified method for business use of home deduction: The IRS now provides a simplified method to determine expenses for business use of your home.
The following are some of the tax changes for 2014:
» Standard mileage rate: For 2014, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for each mile of business use is 56 cents per mile.
» Self-employment tax: The maximum net self-employment earnings subject to the social security part of the self-employment tax is $117,000 for 2014.
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