Tax Season 2022-Key Dates

The one thing that you should always have an eye on and awareness about are the key deadlines in the tax season. You can take some of the stress out of the tax season, if you stay on top of all the tax season filing deadlines.

It is also imperative you convey these dates to your clients so that they send in all the information your way before these deadlines.

So, let’s get started on the deadlines:

Individual Income Tax Returns: April 15 is the deadline to file individual income tax returns and this is a weekday in 2022. But, considering that this day is also Emancipation Day, celebrated in Washington D.C., and all businesses and government offices remain closed on April 15, the filing deadline moves to Monday, April 18, 2022.

For Maine and Massachusetts that celebrate Patriot’s Day on April 18, 2022, the deadline is April 19, 2022.

IRS Forms: 1040 & 1040-SR (for 65 years and older)

Checklist: Download and go through the following Form 1040 Checklist for accountants

Partnership and S-Corporation Returns: Typically, the due date for returns for partnerships and S-Corporation is March 15. A request for a six-month extension will mean the deadline will be September 15.

IRS Forms: 1065 and 1120-S

Corporation Income Tax Returns: The due date for tax filing is April 18, 2022, and the deadline extension is October 17, 2022. For corporation or C-corp tax returns, you need to bear in mind that the 15^th day of the fourth month after a corporation’s fiscal year ends, is the deadline. That is of course, if the corporation follows the fiscal year and not the calendar year.

IRS Form: 1120

What Happens When You File Late?

Short answer – A penalty.

A financial penalty is typically levied, which can take the form of an extra interest charge. This is why it is so important that not only CPAs but even your clients are well aware of the dates. This ensures requisite information can be shared in good time, so that the filing deadlines are met seamlessly.

The two primary penalties include:

Failure-to-file penalty: If you fail to file 1040 returns on time, the penalty is 5% of the tax amount due each month as of tax year 2021. The cap is 25% overall, and additional fees can be charged after 60 days of missing the deadline.

Failure-to-pay penalty: This is 0.5% per month or even part of the month, and maxes out at 25% of the tax that remains unpaid from due date, till the date it is paid in full.

Due to unforeseen circumstances, there can be a case wherein your client cannot meet the filing deadline, and filing late is a given. In this case, you can get an automatic extension by filing IRS Form 4868. Typically, this means that the tax filing deadline will extend to October, 15.

But bear in mind that an extension to file returns doesn’t translate into an extension to pay. Your client will still have to pay all taxes owed by April 18. Not doing so, will mean a penalty will come into play.

Tax Season 2022 Begins in Earnest

The season kicked off on Jan 24, when the IRS started accepting and processing new returns. As a rule, firms ready themselves to face the tax onslaught at least a month or a few months in advance. When we say getting ready for the tax season, it means knowing about the dates, mentioned above, but also starting client interaction to get an idea of the amount of tax work that will come to your firm; and getting ready to handle this workload. This means building appropriate team strength to increase productivity.

The idea is to make the most of Tax Season 2022.

The Deadline Headache and Tax Outsourcing

The problem is not the tax filing deadline in itself, but the inability to ensure you and your team of tax preparers have all the information on hand to prepare tax returns. This requires not only being aware of the dates, but strategizing a plan of action that will help you get all the information from the client’s end.

As can be imagined, this requires plenty of client communication and back and forth; and this can take up time. Once you have all the information, you will still need to crunch those numbers and prepare taxes.

Why not outsource tax preparation? A reputed outsourcing provider will turnaround a prepared tax return quickly, ensuring your firm can do more taxes. More importantly, you can extend your team with highly qualified and knowledgeable tax preparers who know their way around both Federal and State Tax legislation.

All you need to do is send work their way, they will use the information you send to prepare tax returns, and they will get back to you if there is anything missing. Or, you could ask them to take point and make sure they prepare returns from scratch and also handle client communication (in case of missing information).

With tax outsourcing, you increase productivity and free up valuable time that will otherwise be spent in data entry and compliance. This helps you focus on client engagement, which in turn allows you to manage client expectations better.

Conclusion

Planning for Tax Season 2022 also involves making sure you have the tax preparers in place to optimize tax preparation and meet all deadlines. This isn’t easy and you need help. This help is available if you outsource tax preparation services.