January 22, 2025 • 17 mins
Tax season is here and this episode delivers our help to navigate it successfully. We discuss critical deadlines, necessary filings, and how to prepare efficiently for your taxes while avoiding common mistakes. We cover all the questions that have been hitting our inbox this week to help you get 2024 wrapped up and organized to file your tax return!
• Importance of early preparation for tax season
• Key deadlines for end-of-year filings like W-2s and 1099s
• 1099 requirements and deadlines
• Using QuickBooks and digital tools for filing
• What documents to submit to your CPA
• Important tax due dates
• Tax extensions and penalties
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
So if you owe money, the IRS doesn't care if you
extend, but you still have topay by April 15.
And I know that sounds silly,because people always say how do
I know how much to pay?
And the IRS says you have toguess.
And if you guess incorrectlyand you don't pay enough,
they'll penalize you and chargeyou interest and penalties on
the amount that you owe.
But even then the amount youpaid will drastically reduce the
(00:24):
interest and penalties becausethose are only charged on the
amount that you still owe afterApril 15th.
Welcome to what your CPA Wantsyou To Know.
Speaker 2 (00:38):
Tax and accounting help can be expensive, so we've
created this podcast to helpguide you through it all and
make you feel like you have aCPA in your back pocket.
Speaker 1 (00:48):
I'm Carson Sands.
Speaker 2 (00:49):
And I'm Taryn Sands.
Speaker 1 (00:51):
I'm a CPA with over 10 years of experience helping
people start and grow theirbusinesses.
Speaker 2 (00:57):
And I'm an MBA with a specialization in marketing and
entrepreneurship.
Taxes suck and we want to makesure you don't pay more than
your fair share.
Speaker 1 (01:07):
We're here to share everything your CPA wants you to
know in a fun and easy tounderstand way.
Let's get started.
Speaker 2 (01:15):
Let's do it.
So I snagged Carson today foran episode, so he is here and
accounted for today.
Speaker 1 (01:25):
Present.
Speaker 2 (01:26):
He actually has no idea what the podcast episode is
going to be about.
I just said can you please runin here and help me record a
podcast episode very quickly, sohe doesn't even know what we're
going to be talking about today.
Speaker 1 (01:38):
Is it how to perform triple bypass heart surgery?
Speaker 2 (01:42):
Yes, exactly.
Speaker 1 (01:43):
Perfect.
Speaker 2 (01:44):
Well, I'm sure you guessed.
It's something you can talkabout, so you don't have to be
prepared.
You're ready to go.
Speaker 1 (01:48):
All right.
Speaker 2 (01:49):
But, like I said, it's been really hard for us to
figure out time to record thepodcast with all the things.
So we don't know how thepodcast is going to be for 2025.
So stay tuned for that, butwe've got to make some changes
for sure.
Speaker 1 (02:05):
There will probably almost certainly be fewer
episodes during tax season, atleast this year, but if you have
questions, you should go backto our old episodes.
We have covered so many topicsand, while a few of the tax laws
have changed and some of themmight not be relevant anymore, I
would say 95% of theinformation out there is still
completely relevant to today'stax rules.
Speaker 2 (02:27):
So, absolutely, I feel like we've covered all of
the like questions that we getall the time, because it's so
helpful for us to send those tolike our clients or people
asking on Instagram, and we havealmost 100 episodes, so I'm
proud of us that we have thatmany and if anything does pop up
, that's super important.
We definitely plan to do a newepisode on that, but for now,
(02:50):
we're going to be slowing downand we just don't even know what
that looks like yet.
So stay tuned for that.
And in case you were wondering,carson, today's episode is all
about tax season, getting readyfor it and the questions that
we're getting.
So I just put together all thequestions that I've seen come in
just this week and we're goingto go through them very quickly
(03:10):
and I'm going to have you answerthem.
Speaker 1 (03:12):
What's tax season?
Speaker 2 (03:14):
He's got jokes but they're not very funny because
tax season has already started.
And that's his brain right now.
All right, moving right along.
The first question is what allare the end of year filings that
are due like right now?
All right, moving right along.
The first question is what allare the end of year filings that
are due like right now, inJanuary?
So if maybe someone's new toall of these filings or they
just need a refresher, what areon business owner to-do list
(03:36):
right now?
Speaker 1 (03:37):
Okay, the first thing I would think of is January
15th.
Estimated tax payment numberfour is due.
This would still be for the2024 tax year, but you actually
have until January 15th ofestimated tax payment.
Number four is due.
This would still be for the2024 tax year, but you actually
have until January 15th of thisyear 2025, to make that fourth
quarter estimated payment.
Speaker 2 (03:52):
So that's coming up.
Last thing you need to do for2024 for estimated tax payments
and what else.
Speaker 1 (03:57):
Another deadline is that if you file your tax return
on time and by that I mean veryearly by January 29th,
sometimes they let you skip thatJanuary 15th estimated tax
payment and you can pay withyour tax return.
But they give you a very smallwindow because the opening day
for tax season is January 27thand you would need to have it
(04:18):
filed by January 29th.
Speaker 2 (04:19):
Which, let's be honest, we don't know if that's
for sure going to be the case.
They say that that might beopen 27th, but they might push
it.
Speaker 1 (04:27):
Oh no, the IRS has never lied to us.
There are benign, beneficialhelpers.
Speaker 2 (04:32):
Oh my gosh.
Okay, it might be the 27th, itmight not be, so you cannot file
a tax return yet for 2024.
File a tax return yet for 2024.
And the other filings that youprobably have already done or
know about, but we'll mention,is you've got to do the W-2s and
your 941 and your 940, which940 is just the yearly one, so
(04:53):
that's just done once a year.
Speaker 1 (04:54):
For unemployment tax.
Speaker 2 (04:56):
Yes, all of those things are going to apply to you
if you have payroll, so that'snot going to apply to you.
If you're just a, so that's notgoing to apply to you.
If you're just a soleproprietorship and you have a
Schedule C on your tax return,that doesn't apply.
But what does apply is sendingout 1099s.
So who needs a 1099?
What are the rules on that?
Give us a quick answer on those.
Speaker 1 (05:16):
Okay.
So this is a big one and thatis due January 31st to the
people you give the 1099s to.
There's been somemisinformation I won't say
misinformation, confusinginformation out there where
people have said 1099s are dueFebruary 28th or March 15th.
If you e-file, that's when theelectronic copy that the IRS has
to get is due, but that is notwhen the recipient copies are
(05:39):
due, the recipient being theperson that you actually are
giving the 1099 to.
So those are due January 31st.
And for a 1099-NEC form, thiswould be contract labor, people
that work for you, that dovarious things for you.
So that would be anybody thatis paid over $600 for the year
it's actually $600 or more.
(06:00):
So even if it was exactly $600,they would have to get a 1099.
And also, they're not acorporation.
Speaker 2 (06:06):
Right.
So there's about a millionother questions you could ask
about this.
We do have a 1099 episode thatyou can go back to.
It's going to go into a lotmore detail on that, so if this
is your first time filing, Iwould suggest going back to our
old 1099 episode from last year.
Now another question I got wascan you do it in QuickBooks?
Yes, you can.
(06:27):
If you have all the informationand put there, and it's correct
, you can file 1099s inQuickBooks if you're using that.
If you don't have it inQuickBooks or you're not using
QuickBooks, we use a site calledyearlycom and you can file that
there.
So all you need is theinformation for the person
(06:47):
you're sending it and then youneed the amount paid.
So if you have that, you can goon there, file it.
It will mail them a copy and itwill submit it with the IRS.
So you'll be good to go.
Speaker 1 (06:58):
That's Y-E-A-R-L-I.
Speaker 2 (07:01):
Yes, yearly, with an I, and we use it.
It's easy.
We tell everybody to use it.
So if you don't have a way todo that, you can do it on there.
I promise you it's very simple.
The next question that came upis what do I need to file my tax
return as a business owner?
And Carson's giving me the facelike oh my gosh, there's so
(07:22):
many things.
So, yes, right now is theperfect time to start preparing
to do your tax return.
But for a business owner, youhave to have your books ready to
go, and that means, if you'reusing QuickBooks, they have to
be categorized and reconciledthrough the year and you need
your assets together and youneed to have your mileage, if
you have any business miles.
(07:42):
So there's a lot of things,actually, and we do have a
checklist.
It's on our Instagram.
It will go through every singlething that you do need.
So what we want to take homefrom this episode is that make
sure that you've done all thethings on the checklist before
contacting your CPA or sendingthem part of it, because you
don't want to send them half ofit and not be ready and then
(08:03):
send them part of it.
So no piece mailing, and thereason for that is that they
will work on your return if theythink that it's ready, and then
it's actually not ready.
So to make sure you're notgetting charged for extra time
or anything, just make sure thatyou have everything ready to go
.
So check out the checklist.
And then the other questionthat came in along that lines
was do you need receipts to goalong with all of those things
(08:25):
in your QuickBooks?
Speaker 1 (08:26):
Never.
Speaker 2 (08:27):
The answer is a hard no.
We don't want your receipts.
You don't need those.
If you are giving youraccountant your books, however
you're giving them, you do notneed the receipts to back them
up.
Your accountant is not theperson that is checking to make
sure that you're not lying.
That is not their job.
But you would need those if youwere to be audited so you can
save them, but don't give themto your CPA.
Speaker 1 (08:49):
So I guess, to be more specific, we don't need
them.
You might need them if you getaudited, but we don't need them.
Speaker 2 (08:54):
We'll take your word for it.
Yeah, For your tax return.
You don't need to drop off allof your receipts to your CPA to
back up your books.
Speaker 1 (09:01):
Right, there are ways to upload your receipts into
QuickBooks.
If you have them and you'reafraid they're going to fade or
that you're going to lose themor something like that, then
there are ways to take picturesand upload those and attach them
to the transactions.
I wouldn't recommend doing itfor every single little
transaction that you have, butif it's a major purchase or
something that you're afraid theIRS might not believe was
actually business relatedwithout the receipt, then that's
(09:23):
one way to do that.
Speaker 2 (09:24):
Absolutely.
So you're going to do all ofthose end of year filings for to
wrap up 2024.
Then you need to get your booksin order, reconcile, categorize
, do all the things, go throughthe checklist so say you've done
all that and you make sure thatyou don't send your receipts to
your CPA.
What are the actual due dates?
So can you go through those?
Because a lot of people areconfused.
(09:47):
Maybe their first year filingfor their business.
Speaker 1 (09:49):
Yes.
So if you're filing an S-corpor a partnership return, then
that's due March 15th, so that'sa month earlier than the
typical April 15th due date whenyour individual personal tax
return is due.
The reason for that is theywanna make sure that there's
time for you to get your K-1from those partnerships or
S-Corps and report that on yourpersonal tax return.
(10:10):
Now, april 15th, of course, isthe due date for your 1040,
which is your individual taxreturn filing, the 1041, which
is filed for estates and trusts,and for the 1120 for C
corporations.
This would not be Scorporations, this would be C
corporations, which are taxpaying corporations.
Speaker 2 (10:29):
Yeah.
So, as you can see, that can beconfusing because if you're
used to just filing on April15th, if you have a business
that files a business tax returnthat's a partnership or an S
corp you actually have anotherdue date and it's a month before
.
So, especially if you havepartners and everybody is on you
because they actually need thatreturn to be wrapped up before
they can file their personal taxreturn.
(10:50):
So just be aware of that, itcomes quick.
Speaker 1 (10:53):
And tell your friends that have an S-Corp or a
partnership, because if theydon't listen to this and they're
not on our mailing list, theymight not know.
I had a client just today tellme who is an S-Corp for the
first time this year.
That, hey, I didn't know thedue date was March 15th until I
got your newsletter that yousend out that has that
information on there.
So people are reading those andwe try not to bombard people
(11:14):
with that and only put importantinformation on there that helps
people so that people don'tunsubscribe.
So it was nice to hear thatsomebody actually read it and
found it useful and was like,okay, now I'm not finding this
out two weeks before March 15th.
Speaker 2 (11:29):
I know months ahead of time and I can plan for it
Absolutely, and that's happeneda lot, especially new S Corp
owners.
They are always surprised bythat.
So March 15th is coming veryquickly, so be ready for that.
If you are not prepared likeand then you're going to, you
know already I'm filing anextension.
This is the next questionthat's been coming in.
What happens if I file anextension?
(11:51):
Like what is it bad?
Is it good?
A lot of people have neverfiled one, so they don't know
how it works.
So there's some very importantinformation that you definitely
need to know if you're going toextend.
Speaker 1 (12:02):
You usually only have to give up one of your children
in order to extend, and thatwill buy you six months of time.
Speaker 2 (12:07):
All the jokes today.
What will really happen?
Speaker 1 (12:10):
Well, when you extend your partnership or S-corp
return, absolutely nothinghappens.
Speaker 2 (12:15):
But if you don't file the extension.
Speaker 1 (12:17):
Then you get penalized severely.
Speaker 2 (12:19):
Yes, you will get a big penalty letter if you didn't
file the extension.
So make sure that you get thatfiled if you need more time.
And then the other part of thisthat people don't often
understand if you can explainwhat happens if you file
personally.
Speaker 1 (12:34):
Ah, now we get to the April 15th deadline and that
extension.
Whether it's for your personalreturn or for a C-Corp return,
both of these people pay taxes.
So if you owe money, the IRSdoesn't care if you extend, but
you still have to pay by April15th.
And I know that sounds silly,because people always say how do
I know how much to pay?
And the IRS says you have toguess.
And if you guess incorrectlybut you pay too much, that's
(12:58):
okay, they'll give you yourmoney back.
If you guess incorrectly and youdon't pay enough, they'll
penalize you and charge youinterest and penalties on the
amount that you owe.
But even then, the amount youpaid will drastically reduce the
interest and penalties becausethose are only charged on the
amount that you still owe afterApril 15th, if that makes any
sense.
So if you owed $10,000, youdidn't know how much you were
(13:21):
going to owe, but you paid an,and then when you go to file it
turns out you owed 10, well,you're only going to get
penalties and interest on the2000 that you still owed after
April 15th, which is much betterthan what it would be exactly,
and that confuses a lot ofpeople.
Speaker 2 (13:35):
I get it, but an extension that you file is an
extension to file your return,not an extension to pay.
They want their money on April15th, no matter matter what.
Speaker 1 (13:44):
And here is something people always ask them why do
we file the extension at all?
Why do we bother?
So the penalties are there butthey're not nearly as high.
Just to give you the quick mathon that, it's about half a
percent.
It's less than 1% per month inpenalties whenever you extend
but you don't pay.
So let's say you do file theextension but you don't pay the
amount you owe, and it's lessthan 1% per month.
(14:06):
But if you don't file theextension, whatever amount you
owe, it's 5% per month.
So the penalties can stack upreally quickly.
Speaker 2 (14:13):
So you absolutely want to file their goofy
extension.
You got to get it filed, yes.
Speaker 1 (14:18):
Even if you're like well, I don't want to file the
extension because I don't havethe money to pay right now.
No, no, no, you need to filethe extension and then just
don't pay.
At least the penalties andinterest will be much lower this
way.
Speaker 2 (14:27):
Exactly so.
The last question on the listthat keeps coming in is how do I
get my tax documents to you?
And I thought we would coverthis because this is new to us.
This year we're not acceptingpaper tax documents for many
reasons, but we've let a lot ofpeople know that, thinking you
know maybe it will inconveniencesome people, but the response
has been yeah, you know, my oldCPA used to do that.
(14:49):
We're just going in thatdirection anyway.
So if you don't have a scanneror whatever, we're going to talk
about that today so you usuallycan either email those over or
some accounting firms have likean upload that you can do.
We're just moving in thedirection of not dropping off
like a box or a shoebox ofdocuments to your tax preparer.
(15:10):
So if you're not going to dropoff your documents and that's
new to you and you're trying tochange over what else can you do
?
And what we're having ourclients do, if they don't have a
way to scan in their documents,is to use an app called Genius
Scan.
It's a free app.
The little icon on your iPhoneis orange and it's very, very
easy to use.
(15:32):
Now, if you're thinking, I haveso many tax documents like
receipts and stuff.
Well, now you learn that youdon't need all those receipts.
So usually when I get a big boxto scan, it's because someone
dropped off a ton of receipts.
So, step one go through the taxchecklist that you can find on
our website or on our Instagrampage.
Go through that and use GeniusScan to scan it all into one PDF
(15:54):
.
And the good thing is it's wayeasier for your CPA to look at
and use to do your tax returnand you'll have it all there in
a PDF.
And then another good thing forus is that it's not in some
weird format, because sometimeswhen people try to send us stuff
, it comes over in a weirdformat, like a video format or
some sort of picture that oursoftware won't use and we have
(16:15):
to, like go back and forth.
So if you do use Genius Scan toget all of your tax documents
into one PDF, it's so nice andeasy.
Speaker 1 (16:23):
Yes, whatever format the pictures are in.
When you take a picture withyour iPhone instead of actually
scanning with an app, it's notalways possible to open that on
a Windows computer.
Speaker 2 (16:34):
Yeah, we're pretty tech savvy, but our software
doesn't like a lot of thoseforms, so an easy PDF is so much
better and so much easier on us.
Speaker 1 (16:44):
And also keep this in mind just because you received
a paper copy doesn't mean thatthere's not a digital copy out
there for you somewhere.
Almost every bank or financialadvisor, or whatever you want to
call it you know your employerthat sends your W-2s.
Almost every single one of themwill have these available for
you in electronic format already.
They just sent you a paper copyas well because you didn't
(17:05):
check some box saying I don'twant the hard copy.
Speaker 2 (17:08):
Absolutely.
You can usually download thoseonline as long as you're able to
log into your account.
So if your CPA does the samething, then try using Genius
Scan, and that is all thequestions that we have for today
, so until next time.
Thank you so much for listeningto.
Speaker 1 (17:24):
What your CPA Wants you To Know.
Speaker 2 (17:26):
Podcast.
Speaker 1 (17:34):
This podcast is intended to provide accounting
and tax information foreducational purposes only.
All tax situations are uniqueand should be handled with the
assistance of a tax professional.
So if you owe money, the IRS doesn't care if you
extend, but you still have topay by April 15.
And I know that sounds silly,because people always say how do
I know how much to pay?
And the IRS says you have toguess.
And if you guess incorrectlyand you don't pay enough,
they'll penalize you and chargeyou interest and penalties on
the amount that you owe.
But even then the amount youpaid will drastically reduce the
(00:24):
interest and penalties becausethose are only charged on the
amount that you still owe afterApril 15th.
Welcome to what your CPA Wantsyou To Know.
Speaker 2 (00:38):
Tax and accounting help can be expensive, so we've
created this podcast to helpguide you through it all and
make you feel like you have aCPA in your back pocket.
Speaker 1 (00:48):
I'm Carson Sands.
Speaker 2 (00:49):
And I'm Taryn Sands.
Speaker 1 (00:51):
I'm a CPA with over 10 years of experience helping
people start and grow theirbusinesses.
Speaker 2 (00:57):
And I'm an MBA with a specialization in marketing and
entrepreneurship.
Taxes suck and we want to makesure you don't pay more than
your fair share.
Speaker 1 (01:07):
We're here to share everything your CPA wants you to
know in a fun and easy tounderstand way.
Let's get started.
Speaker 2 (01:15):
Let's do it.
So I snagged Carson today foran episode, so he is here and
accounted for today.
Speaker 1 (01:25):
Present.
Speaker 2 (01:26):
He actually has no idea what the podcast episode is
going to be about.
I just said can you please runin here and help me record a
podcast episode very quickly, sohe doesn't even know what we're
going to be talking about today.
Speaker 1 (01:38):
Is it how to perform triple bypass heart surgery?
Speaker 2 (01:42):
Yes, exactly.
Speaker 1 (01:43):
Perfect.
Speaker 2 (01:44):
Well, I'm sure you guessed.
It's something you can talkabout, so you don't have to be
prepared.
You're ready to go.
Speaker 1 (01:48):
All right.
Speaker 2 (01:49):
But, like I said, it's been really hard for us to
figure out time to record thepodcast with all the things.
So we don't know how thepodcast is going to be for 2025.
So stay tuned for that, butwe've got to make some changes
for sure.
Speaker 1 (02:05):
There will probably almost certainly be fewer
episodes during tax season, atleast this year, but if you have
questions, you should go backto our old episodes.
We have covered so many topicsand, while a few of the tax laws
have changed and some of themmight not be relevant anymore, I
would say 95% of theinformation out there is still
completely relevant to today'stax rules.
Speaker 2 (02:27):
So, absolutely, I feel like we've covered all of
the like questions that we getall the time, because it's so
helpful for us to send those tolike our clients or people
asking on Instagram, and we havealmost 100 episodes, so I'm
proud of us that we have thatmany and if anything does pop up
, that's super important.
We definitely plan to do a newepisode on that, but for now,
(02:50):
we're going to be slowing downand we just don't even know what
that looks like yet.
So stay tuned for that.
And in case you were wondering,carson, today's episode is all
about tax season, getting readyfor it and the questions that
we're getting.
So I just put together all thequestions that I've seen come in
just this week and we're goingto go through them very quickly
(03:10):
and I'm going to have you answerthem.
Speaker 1 (03:12):
What's tax season?
Speaker 2 (03:14):
He's got jokes but they're not very funny because
tax season has already started.
And that's his brain right now.
All right, moving right along.
The first question is what allare the end of year filings that
are due like right now?
All right, moving right along.
The first question is what allare the end of year filings that
are due like right now, inJanuary?
So if maybe someone's new toall of these filings or they
just need a refresher, what areon business owner to-do list
(03:36):
right now?
Speaker 1 (03:37):
Okay, the first thing I would think of is January
15th.
Estimated tax payment numberfour is due.
This would still be for the2024 tax year, but you actually
have until January 15th ofestimated tax payment.
Number four is due.
This would still be for the2024 tax year, but you actually
have until January 15th of thisyear 2025, to make that fourth
quarter estimated payment.
Speaker 2 (03:52):
So that's coming up.
Last thing you need to do for2024 for estimated tax payments
and what else.
Speaker 1 (03:57):
Another deadline is that if you file your tax return
on time and by that I mean veryearly by January 29th,
sometimes they let you skip thatJanuary 15th estimated tax
payment and you can pay withyour tax return.
But they give you a very smallwindow because the opening day
for tax season is January 27thand you would need to have it
(04:18):
filed by January 29th.
Speaker 2 (04:19):
Which, let's be honest, we don't know if that's
for sure going to be the case.
They say that that might beopen 27th, but they might push
it.
Speaker 1 (04:27):
Oh no, the IRS has never lied to us.
There are benign, beneficialhelpers.
Speaker 2 (04:32):
Oh my gosh.
Okay, it might be the 27th, itmight not be, so you cannot file
a tax return yet for 2024.
File a tax return yet for 2024.
And the other filings that youprobably have already done or
know about, but we'll mention,is you've got to do the W-2s and
your 941 and your 940, which940 is just the yearly one, so
(04:53):
that's just done once a year.
Speaker 1 (04:54):
For unemployment tax.
Speaker 2 (04:56):
Yes, all of those things are going to apply to you
if you have payroll, so that'snot going to apply to you.
If you're just a, so that's notgoing to apply to you.
If you're just a soleproprietorship and you have a
Schedule C on your tax return,that doesn't apply.
But what does apply is sendingout 1099s.
So who needs a 1099?
What are the rules on that?
Give us a quick answer on those.
Speaker 1 (05:16):
Okay.
So this is a big one and thatis due January 31st to the
people you give the 1099s to.
There's been somemisinformation I won't say
misinformation, confusinginformation out there where
people have said 1099s are dueFebruary 28th or March 15th.
If you e-file, that's when theelectronic copy that the IRS has
to get is due, but that is notwhen the recipient copies are
(05:39):
due, the recipient being theperson that you actually are
giving the 1099 to.
So those are due January 31st.
And for a 1099-NEC form, thiswould be contract labor, people
that work for you, that dovarious things for you.
So that would be anybody thatis paid over $600 for the year
it's actually $600 or more.
(06:00):
So even if it was exactly $600,they would have to get a 1099.
And also, they're not acorporation.
Speaker 2 (06:06):
Right.
So there's about a millionother questions you could ask
about this.
We do have a 1099 episode thatyou can go back to.
It's going to go into a lotmore detail on that, so if this
is your first time filing, Iwould suggest going back to our
old 1099 episode from last year.
Now another question I got wascan you do it in QuickBooks?
Yes, you can.
(06:27):
If you have all the informationand put there, and it's correct
, you can file 1099s inQuickBooks if you're using that.
If you don't have it inQuickBooks or you're not using
QuickBooks, we use a site calledyearlycom and you can file that
there.
So all you need is theinformation for the person
(06:47):
you're sending it and then youneed the amount paid.
So if you have that, you can goon there, file it.
It will mail them a copy and itwill submit it with the IRS.
So you'll be good to go.
Speaker 1 (06:58):
That's Y-E-A-R-L-I.
Speaker 2 (07:01):
Yes, yearly, with an I, and we use it.
It's easy.
We tell everybody to use it.
So if you don't have a way todo that, you can do it on there.
I promise you it's very simple.
The next question that came upis what do I need to file my tax
return as a business owner?
And Carson's giving me the facelike oh my gosh, there's so
(07:22):
many things.
So, yes, right now is theperfect time to start preparing
to do your tax return.
But for a business owner, youhave to have your books ready to
go, and that means, if you'reusing QuickBooks, they have to
be categorized and reconciledthrough the year and you need
your assets together and youneed to have your mileage, if
you have any business miles.
(07:42):
So there's a lot of things,actually, and we do have a
checklist.
It's on our Instagram.
It will go through every singlething that you do need.
So what we want to take homefrom this episode is that make
sure that you've done all thethings on the checklist before
contacting your CPA or sendingthem part of it, because you
don't want to send them half ofit and not be ready and then
(08:03):
send them part of it.
So no piece mailing, and thereason for that is that they
will work on your return if theythink that it's ready, and then
it's actually not ready.
So to make sure you're notgetting charged for extra time
or anything, just make sure thatyou have everything ready to go
.
So check out the checklist.
And then the other questionthat came in along that lines
was do you need receipts to goalong with all of those things
(08:25):
in your QuickBooks?
Speaker 1 (08:26):
Never.
Speaker 2 (08:27):
The answer is a hard no.
We don't want your receipts.
You don't need those.
If you are giving youraccountant your books, however
you're giving them, you do notneed the receipts to back them
up.
Your accountant is not theperson that is checking to make
sure that you're not lying.
That is not their job.
But you would need those if youwere to be audited so you can
save them, but don't give themto your CPA.
Speaker 1 (08:49):
So I guess, to be more specific, we don't need
them.
You might need them if you getaudited, but we don't need them.
Speaker 2 (08:54):
We'll take your word for it.
Yeah, For your tax return.
You don't need to drop off allof your receipts to your CPA to
back up your books.
Speaker 1 (09:01):
Right, there are ways to upload your receipts into
QuickBooks.
If you have them and you'reafraid they're going to fade or
that you're going to lose themor something like that, then
there are ways to take picturesand upload those and attach them
to the transactions.
I wouldn't recommend doing itfor every single little
transaction that you have, butif it's a major purchase or
something that you're afraid theIRS might not believe was
actually business relatedwithout the receipt, then that's
(09:23):
one way to do that.
Speaker 2 (09:24):
Absolutely.
So you're going to do all ofthose end of year filings for to
wrap up 2024.
Then you need to get your booksin order, reconcile, categorize
, do all the things, go throughthe checklist so say you've done
all that and you make sure thatyou don't send your receipts to
your CPA.
What are the actual due dates?
So can you go through those?
Because a lot of people areconfused.
(09:47):
Maybe their first year filingfor their business.
Speaker 1 (09:49):
Yes.
So if you're filing an S-corpor a partnership return, then
that's due March 15th, so that'sa month earlier than the
typical April 15th due date whenyour individual personal tax
return is due.
The reason for that is theywanna make sure that there's
time for you to get your K-1from those partnerships or
S-Corps and report that on yourpersonal tax return.
(10:10):
Now, april 15th, of course, isthe due date for your 1040,
which is your individual taxreturn filing, the 1041, which
is filed for estates and trusts,and for the 1120 for C
corporations.
This would not be Scorporations, this would be C
corporations, which are taxpaying corporations.
Speaker 2 (10:29):
Yeah.
So, as you can see, that can beconfusing because if you're
used to just filing on April15th, if you have a business
that files a business tax returnthat's a partnership or an S
corp you actually have anotherdue date and it's a month before
.
So, especially if you havepartners and everybody is on you
because they actually need thatreturn to be wrapped up before
they can file their personal taxreturn.
(10:50):
So just be aware of that, itcomes quick.
Speaker 1 (10:53):
And tell your friends that have an S-Corp or a
partnership, because if theydon't listen to this and they're
not on our mailing list, theymight not know.
I had a client just today tellme who is an S-Corp for the
first time this year.
That, hey, I didn't know thedue date was March 15th until I
got your newsletter that yousend out that has that
information on there.
So people are reading those andwe try not to bombard people
(11:14):
with that and only put importantinformation on there that helps
people so that people don'tunsubscribe.
So it was nice to hear thatsomebody actually read it and
found it useful and was like,okay, now I'm not finding this
out two weeks before March 15th.
Speaker 2 (11:29):
I know months ahead of time and I can plan for it
Absolutely, and that's happeneda lot, especially new S Corp
owners.
They are always surprised bythat.
So March 15th is coming veryquickly, so be ready for that.
If you are not prepared likeand then you're going to, you
know already I'm filing anextension.
This is the next questionthat's been coming in.
What happens if I file anextension?
(11:51):
Like what is it bad?
Is it good?
A lot of people have neverfiled one, so they don't know
how it works.
So there's some very importantinformation that you definitely
need to know if you're going toextend.
Speaker 1 (12:02):
You usually only have to give up one of your children
in order to extend, and thatwill buy you six months of time.
Speaker 2 (12:07):
All the jokes today.
What will really happen?
Speaker 1 (12:10):
Well, when you extend your partnership or S-corp
return, absolutely nothinghappens.
Speaker 2 (12:15):
But if you don't file the extension.
Speaker 1 (12:17):
Then you get penalized severely.
Speaker 2 (12:19):
Yes, you will get a big penalty letter if you didn't
file the extension.
So make sure that you get thatfiled if you need more time.
And then the other part of thisthat people don't often
understand if you can explainwhat happens if you file
personally.
Speaker 1 (12:34):
Ah, now we get to the April 15th deadline and that
extension.
Whether it's for your personalreturn or for a C-Corp return,
both of these people pay taxes.
So if you owe money, the IRSdoesn't care if you extend, but
you still have to pay by April15th.
And I know that sounds silly,because people always say how do
I know how much to pay?
And the IRS says you have toguess.
And if you guess incorrectlybut you pay too much, that's
(12:58):
okay, they'll give you yourmoney back.
If you guess incorrectly and youdon't pay enough, they'll
penalize you and charge youinterest and penalties on the
amount that you owe.
But even then, the amount youpaid will drastically reduce the
interest and penalties becausethose are only charged on the
amount that you still owe afterApril 15th, if that makes any
sense.
So if you owed $10,000, youdidn't know how much you were
(13:21):
going to owe, but you paid an,and then when you go to file it
turns out you owed 10, well,you're only going to get
penalties and interest on the2000 that you still owed after
April 15th, which is much betterthan what it would be exactly,
and that confuses a lot ofpeople.
Speaker 2 (13:35):
I get it, but an extension that you file is an
extension to file your return,not an extension to pay.
They want their money on April15th, no matter matter what.
Speaker 1 (13:44):
And here is something people always ask them why do
we file the extension at all?
Why do we bother?
So the penalties are there butthey're not nearly as high.
Just to give you the quick mathon that, it's about half a
percent.
It's less than 1% per month inpenalties whenever you extend
but you don't pay.
So let's say you do file theextension but you don't pay the
amount you owe, and it's lessthan 1% per month.
(14:06):
But if you don't file theextension, whatever amount you
owe, it's 5% per month.
So the penalties can stack upreally quickly.
Speaker 2 (14:13):
So you absolutely want to file their goofy
extension.
You got to get it filed, yes.
Speaker 1 (14:18):
Even if you're like well, I don't want to file the
extension because I don't havethe money to pay right now.
No, no, no, you need to filethe extension and then just
don't pay.
At least the penalties andinterest will be much lower this
way.
Speaker 2 (14:27):
Exactly so.
The last question on the listthat keeps coming in is how do I
get my tax documents to you?
And I thought we would coverthis because this is new to us.
This year we're not acceptingpaper tax documents for many
reasons, but we've let a lot ofpeople know that, thinking you
know maybe it will inconveniencesome people, but the response
has been yeah, you know, my oldCPA used to do that.
(14:49):
We're just going in thatdirection anyway.
So if you don't have a scanneror whatever, we're going to talk
about that today so you usuallycan either email those over or
some accounting firms have likean upload that you can do.
We're just moving in thedirection of not dropping off
like a box or a shoebox ofdocuments to your tax preparer.
(15:10):
So if you're not going to dropoff your documents and that's
new to you and you're trying tochange over what else can you do
?
And what we're having ourclients do, if they don't have a
way to scan in their documents,is to use an app called Genius
Scan.
It's a free app.
The little icon on your iPhoneis orange and it's very, very
easy to use.
(15:32):
Now, if you're thinking, I haveso many tax documents like
receipts and stuff.
Well, now you learn that youdon't need all those receipts.
So usually when I get a big boxto scan, it's because someone
dropped off a ton of receipts.
So, step one go through the taxchecklist that you can find on
our website or on our Instagrampage.
Go through that and use GeniusScan to scan it all into one PDF
(15:54):
.
And the good thing is it's wayeasier for your CPA to look at
and use to do your tax returnand you'll have it all there in
a PDF.
And then another good thing forus is that it's not in some
weird format, because sometimeswhen people try to send us stuff
, it comes over in a weirdformat, like a video format or
some sort of picture that oursoftware won't use and we have
(16:15):
to, like go back and forth.
So if you do use Genius Scan toget all of your tax documents
into one PDF, it's so nice andeasy.
Speaker 1 (16:23):
Yes, whatever format the pictures are in.
When you take a picture withyour iPhone instead of actually
scanning with an app, it's notalways possible to open that on
a Windows computer.
Speaker 2 (16:34):
Yeah, we're pretty tech savvy, but our software
doesn't like a lot of thoseforms, so an easy PDF is so much
better and so much easier on us.
Speaker 1 (16:44):
And also keep this in mind just because you received
a paper copy doesn't mean thatthere's not a digital copy out
there for you somewhere.
Almost every bank or financialadvisor, or whatever you want to
call it you know your employerthat sends your W-2s.
Almost every single one of themwill have these available for
you in electronic format already.
They just sent you a paper copyas well because you didn't
(17:05):
check some box saying I don'twant the hard copy.
Speaker 2 (17:08):
Absolutely.
You can usually download thoseonline as long as you're able to
log into your account.
So if your CPA does the samething, then try using Genius
Scan, and that is all thequestions that we have for today
, so until next time.
Thank you so much for listeningto.
Speaker 1 (17:24):
What your CPA Wants you To Know.
Speaker 2 (17:26):
Podcast.
Speaker 1 (17:34):
This podcast is intended to provide accounting
and tax information foreducational purposes only.
All tax situations are uniqueand should be handled with the
assistance of a tax professional.
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