By Edward Mendlowitz, CPA.
This blog was prepared with the assistance of Peter Weitsen, CPA, partner at WithumSmith+Brown, PC
One way to navigate successfully through the federal tax-compliance and planning process is to be very aware of deadlines and time periods that apply under IRS tax rules. Here is a listing of some of the more common ones for individuals.* (You might want to bookmark this column and refer to it frequently until you get into the habit of checking for deadlines. Also, before any transaction with tax consequences is contemplated, consider meeting with a tax adviser.)
- Due date for the final installment of the previous year’s estimated taxes.(When any due date falls on a holiday or weekend, the next regular business day becomes the due date.)
- Due date for individual tax returns and trust tax returns or to request an automatic six-month extension.
- Last day to make IRA contributions for the prior year.
- Due date for the first installment of the current year’s estimated taxes.
- Due date for the second installment of the current year’s estimated taxes.
- Due date for filing Form 5500 with the Department of Labor describing finances of a solo 401(k) or certain other qualified retirement plan with more than $250,000 in assets, or for filing to request an extension until October 15.
- Due date for the third installment of the current year’s estimated taxes.
- Extended due date for trust returns.
- Deadline to open a SIMPLE (Savings Investment Match Plan for Employees) IRA for the current year for certain small businesses.
- Final due date for individual tax returns if an automatic extension was requested.
- Final date, if you had an extension, to file to open a SEP (Simplified Employee Pension) plan for the previous year and make payment to get a deduction for the prior year.
- Final due date for Form 5500 if an extension was requested.
- Your marital status for the entire year is determined based on your status on this date. Couples who are married on this date would file joint returns or married filing separate returns. Divorced couples can file as single or head of household if there is a dependent child.
- The last day to open a qualified employee benefit plan or a 401(k) account.
- Last day to make tax-deductible payments or charge such payments on a credit card for charity contributions, medical expenses and similar items you will be deducting on your individual tax return.
- If securities that were sold at a loss—or “substantially identical” securities—are reacquired within 30 days, this is considered a “wash sale” and the loss cannot be currently deducted. The loss that cannot be deducted would be added to the cost basis of the reacquired shares.
- IRA withdrawals that are deposited in a new IRA or returned to the same IRA within 60 days would be considered a tax-free rollover. However, this is only permitted to be done one time in a 12-month period to avoid taxation and penalties. Note that unlimited direct transfers or rollovers from one retirement account or IRA directly to another are permitted without tax consequences.
- Deadline to file a petition at Tax Court if you received a notice of deficiency from the IRS. (The postmark date is what counts so proof of mailing should be obtained.)
- Deadline to do a like-kind exchange to avoid current taxation on the sale of real estate. This is called a Section 1031 exchange.
- Deadline to invest capital gains sales proceeds in a Qualified Opportunity Zone fund to defer or avoid taxation on certain capital gains. The 180 days begins on the date of the sale or exchange. This needs to be discussed with a tax specialist beforehand.
- People who claim to be a nonresident of a state must not spend any part of 183 days in that state—that is, they must be out of the state at least 183 days (and be able to prove it).
- There is a foreign-earned-income exclusion for those who work in a foreign country and are physically out of the US for 330 full days during a 12-month period. The days do not need to be consecutive.
More than one year
- Holding period to qualify for long-term capital gains tax treatment.
- The deadline to file an amended return is three years after the original due date or extended due date or the date the return was filed if earlier.
- The deadline to file a late return and get a refund on overpaid withholding taxes or estimated tax payments. The end of this time period depends on the initial due date for the particular year.
- The statute of limitations prohibits a return from being audited unless there is a fraudulent activity on the tax return, in which case the statute is extended to six years. (For a 25% understatement of gross income, there is a six-year statute unless there is a fraudulent activity, which has no statute.)
No statute of limitations
- There is no statute of limitations for an unfiled tax return. This means there is no limit on how long the IRS can come after you for an unfiled tax return.
**State tax rules may be different. The information does not apply to business filings or payroll taxes.