IRS Extends Filing Deadline For Some Tax-Exempt Organizations Until March

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If you work with a tax-exempt organization or are a tax-exempt organization whose fiscal year ended August 31st or September 30, 2011 with January and February 2012 filing due dates, the IRS has extended the filing deadline until March 31, 2012.

The reason for the extension is because the part of the e-filing system that processes electronically filed returns for tax-exempt organizations will be off-line during the months of January and February.  The IRS stressed that the rest of the e-file system will be operating normally.

The extension also applies to organizations who had applied for a three month extension that would have resulted in a January or February deadline.  Most tax-exempt organizations are not affected by this as their extended deadline will be in May of 2012.

Organizations that file Form 990, Form 990-EZ, Form 990-PF, 1120-POL are affected by the extension.  Organizations that file Form 990-N are not affected because they do not have to file returns.

You may receive a late filing penalty notice, so in order to avoid, that attach a reasonable cause statement to the tax return.  Or you could file the return before the end of the year.  Further information can be found in Notice 2012-4.

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Independent Contractor or Employee?

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As a business owner you may hire individuals to help you with the running of the operations of your business.  Are the individuals working for you classified correctly? The IRS has rules on how a worker needs to be classified.  Misclassifying a worker can cause you, the employer, penalties.

The IRS has seven tips that an employer should know when classifying a worker.

  • There are three characteristics the IRS uses to determine whether a worker is an employee or independent.  They are:

Behavioral Control – do you, the business,  have the right to direct or control the     worker’s activity through training or instructions?

Financial Control – do you, the business, have the right to control the financial aspect of the worker’s financial status?

Type of Relationship – what do you, the business owner, and the worker perceive the relationship to be?

  • Your workers are most likely employees if you are controlling their activities, directing their activities and giving them deadlines on when the work needs to be completed.
  • If you are only controlling the result of the work, but not the means and methods or reaching the results, then they may be an independent contractor.
  • If you misclassify your workers you may be faced with high tax bills, along with failure to file penalties, late fees, etc.
  • If you are a worker, you could pay less taxes if you are being misclassified incorrectly as an independent contractor.  As an independent contractor you are subject to self-employment tax.  As an employee, the employer pays part of the social security and medicare tax.
  • If you are unsure of how to classify a worker you can request help from the IRS by filling Form SS-8.
  • You may qualify for relief under Section 530. which states that you are treating your workers as independent contractors because it is an industry standard for that worker, or you have relied upon advise from an attorney or accountant.  To qualify for this relief you will have to have mailed the required 1099 Misc. forms and treated all workers in the classification the same way.

More information can be found in the IRS Website by clicking on the Business link.

April 15th – Emancipation Day?

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April 15th is suppose to be the deadline for filing your income taxes.  That is the deadline every year, unless of course that day falls on a weekend, and then the deadline is the following Monday.  The 15th falls on a Friday this year.  So why is the deadline on Monday?

As we know by now, it is because there is a holiday in Washington, D.C.  That holiday is Emancipation Day.  But what is Emancipation Day?  I had never heard of it and wondered why Washington, D. C. is the only district that celebrates it.  So I have done some research.

April 16th is the actual date that is celebrated, but this year it falls on a Saturday so it will be celebrated on the Friday before.  On April 16th, 1862 President Abraham Lincoln signed a bill, the Compensation Emancipation Act, into legislation ending slavery in the District of Columbia nine months before he issued his Emancipation Proclamation.  The act freed around 3,100 slaves.

The act provided for emancipation and $300 compensation for loyal Union slave owners who freed their slaves, voluntary colonization of former slaves to locations outside of the United States and payments of $100 to each person choosing emigration.  African Americans were thrilled with their freedom and celebrated the signing of this act on April 16th from 1866 to 1901 with parades and festivals.  The celebrations resumed in 2002.

In 2005 Emancipation Day became an official holiday in Washington, D. C.  A week before the holiday, a series of commemorative and educational activities are held that celebrates the end of slavery in Washington, D. C.  On the day of the holiday a parade is held.

Other Emancipation Day celebrations

  • Columbus, Mississippi – May 8th
  • Texas – June 19th
  • Puerto Rico – March 22
  • U. S. Virgin Island – July 3rd

I hope you find this information as interesting as I did.  I would love to hear some comments.

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