When Tax Returns Are Due: The Ultimate 2020 Tax Compliance Guide

The phrase “nothing is certain but death and taxes” is a real thing for taxpayers. When tax returns are due, you need to file them on time or be faced with penalties and interest. Not only can this hurt you financially, but it also exposes your business to IRS audits.

Thus, it is important to know when tax returns are due, so you won’t have to pay more than you have to.  The prompt filing of your tax returns allows your company to remain in compliance and in good standing with the IRS.

The best way to save on taxes and prevent audits is by hiring a tax professional  who will file your tax returns on time. They can also help you save on taxes since they have knowledge on the tax code and the application of deductions and credits.

The Basics of Filing Tax Returns

he IRS underwent major changes in 2018. However, the filing deadlines remain relatively consistent with previous years. When you file your return, the amount of tax you’re required to pay (or receive) is determined. If you have a subsisting tax refund, you will receive your refund usually within two to three weeks.  If you file a paper tax return, refunds usually take a little longer.

Filing Deadlines Of Common Tax Forms

If you receive a W-2 form from your employer, it’s likely that your employer is already withholding taxes on your behalf.  However, self-employed taxpayers need to file estimated tax payments each year. The IRS Form 1040-ES must be filed on or before April 15th. However, for those who pay their taxes quarterly, you may file by June 15th or on September 15th. The last deadline for installments is on February 15th of the following year. This type of tax return concerns partnerships. You need to file them on or before March 15th.

This form is called the Estates and Trust Income Tax Return. It’s due on April 15th of every taxable year but is extendable until September 30th.

This is called the C-Corporation Income Tax Return. Corporations are composed of several shareholders who earn income from the venture. However, being a separate and distinct entity from its owners, it must be filed as a separate form when tax returns are due.

Corporations are required to file this by considering the corporate income tax rate, not the shareholders’ personal tax rate.

The deadline for this form falls on April 15th of every calendar year. However, the deadline can be extended until October 15th.

You must file this form by March 15th on a calendar year when tax returns are due. However, the deadline may be extended until September 15th.

Taxes are not paid at the corporate level. However, you must file annually and provide this information to the IRS.

This is the Foreign Bank Account Reports form. It reports the financial interest over foreign financial accounts and filed with the Treasury Department. It’s due by April 15th but extendable until October 15th when filed with Form 1040.

This tax return is filed by employers to their employees which includes the payment of employee compensation, taxes withheld, retirement information and more.

This is an information return that shows income received if you are an independent contractor. If you earn at least $600 as an independent contractor, you must file this accordingly.

This type of tax return is filed by financial institutions. It concerns bonds, mutual funds, sales of stock, and the mutual funds of a brokerage account.

If you earn from investment securities, the IRS requires you to file the information on Form 1099-B. It also shows your cost basis since investment gains or losses are what determines the amount of tax liability.

This tax return refers to real estate transactions. This is where you indicate your capital gains and losses on your annual income tax return.

Property Taxes

Property taxes must be filed promptly when tax returns are due. If your mortgage properties are out of an escrow account, failure to pay the dues puts your property at risk of foreclosure. If these are not escrowed, you should save funds ahead of time just to make sure.

The penalties for late payments when tax returns are due include interest, property liens, and sometimes, foreclosure. The annual property tax bills are usually sent to you by October of each taxable year.

You may pay them in two installments. The first installment is due by November 1st while the second falls due by February 1st of each taxable year.

What To File When You Incur A Penalty

Underpayment of Estimated Tax by Individuals, Estates, and Trusts. It is attached to IRS Form 1040s and IRS Form 1041.

This indicates whether you have a subsisting penalty with the IRS or if you have an overdue balance from the previous taxable period.

First, you must indicate the amount of your annual payment. This tells the IRS how many penalties you incurred when tax returns are due.

Next, you need to indicate a particular reason for filing Form 2210.

Are you requesting a waiver of your penalty? Do you wish to reduce your liability by using the annualized income installment method? Do you have objections or corrections regarding your penalty?

The third step is also indicating whether you want to use the short method or the regular one in paying for the penalties.

The short method is used when you have no estimated tax payments or when you only paid withholding federal income tax.

You use the regular method if you made estimated tax payments but settled them late. This also applies when you are an employee that has not been paid his wages and whose income is subject to withholding income tax.

Finally, the next step proves why a tax professional  is exactly what you need when tax returns are due. This is the part where you will be asked to compute the underpayment you incurred.

Accountants fill out this form without effort. They are experts in knowing how much your liability is by examining your books. They even file other forms so you do not worry about

The Benefits of Your Filing Tax Returns On Time

iling your tax returns ahead of time lets you save more money.

Retirement Plan Contributions

The IRS raised the limit to $19,000 for 401(k), 403(b), and most 457 retirement plan contributions.

The IRA contributions also increased up to $5,500 to $6,000 this year.

Tax Planning Services

You can prevent incurring tax penalties by hiring someone to promptly file with the IRS when tax returns are due.

Accountants are trained to complete financial statements and tax filing initiatives before they are granted their CPA licenses.

Imposing efficient tax planning generates tax-saving solutions. We mitigate your risks of incurring tax penalties and file returns on time so you can avail of tax exclusions and exemptions.



7 Ways To Get A Higher Tax Refund

Nobody wants to overpay on their taxes and many really count on getting a refund. That extra money can be a life-saver just when you need it most. Follow these tips to make sure you’re getting your full refund back this year.

Reevaluate Your Status

Your filing status isn’t an arbitrary classification as may think. For a lot of people, changing their status can have a big impact on the amount they pay and how much they get back. Even if your status seems obvious, go over all the options and figure out which of the choices you qualify for will best serve your wallet.

Take A Crash Course In Credits & Deductions

Too many people assume they already know which tax credits and deductions they qualify for. The problem is, the IRS changes things up from time to time and your life is in constant flux. There’s no way to know if you’re taking advantage of all the possible credits and deductions unless you go through them and check.

The next decision to make is whether or not to itemize your deductions. If, after assessing which you qualify for, you’re sure that your deductions won’t be higher than that of the standard deduction, then stick with that. However, if it could be higher, it may be well worth the time to itemize.

Check The Retirement Account Rules

You may have put enough money into a traditional retirement account this year to put off paying taxes on that money until you withdraw it later in life. Just make sure you specify which year you’d like it to count towards.

Timing Is Key

Many deductions can actually be increased just by making sure to do certain things closer to the end of the year. Your mortgage payment, health expenses, and even work equipment purchases can get you extra deductions if you time them properly.

Double-Check Your Withholding

How much you should be withholding depends on a myriad of factors. Many major life events like marriage, divorce, a baby, or job changes can cause that number to shift. Double-check that you’re still withholding the right amount each year.

The next decision to make is whether or not to itemize your deductions. If, after assessing which you qualify for, you’re sure that your deductions won’t be higher than that of the standard deduction, then stick with that. However, if it could be higher, it may be well worth the time to itemize.

Check The Retirement Account Rules

You may have put enough money into a traditional retirement account this year to put off paying taxes on that money until you withdraw it later in life. Just make sure you specify which year you’d like it to count towards.

Make The Tax-Advantage Your Advantage

A lot of employers provide the option to use tax-advantage spending accounts for things like health expenses and transportation. Check into them and see if you could be using them to raise your refund.

Don’t Rely Solely On Your Own Expertise

This one cannot be stressed enough. It is imperative that you work with a tax expert on these matters. Not only are they very confusing, but there are plenty of really helpful things that only a tax accountant will know how to properly use to your benefit. It’s too important to do alone.

Take Nothing For Granted

So many of these things rely on not being complacent with your taxes. It may be tedious and difficult, but the effort you put in is well worth the money you’ll get out. So double-check everything just to be sure you aren’t missing out on extra savings.


Why Banks Perceive the Financial Risk to Be Greater Among Small Businesses

Traditionally, banks have viewed small business loans as some of the riskiest. The 2018 credit crisis prompted banks to cut their riskiest loans and led to a 30 percent decrease in the amount of government-backed business loans compared to 2007, according to CNN. Much of the hesitation to lend to small businesses comes from the historical rates on small business failure.

Time Frame

The older a small business gets the less likely it is to fail. Young companies, however, have inadequate financial information to judge the health of the company until the two- or three-year mark. Even if the company has a solid business plan, most banks do not want their money tied up in a new venture that could fail in months.


Small businesses have high failure rates in two key areas: loan defaults and company success. According to CNN, in 2009, U.S. Small Business Administration loans had an 11.9 percent default rate. Historically, small business loans have had a default rate of 0 to 28 percent, depending on the location of the business and the state of the economy.

Failure Rates

The actual failure rate of the average small business is unknown, but business consultants usually consider 33 percent a close approximation, according to Gaebler.com, a website focused on small businesses. This failure rate goes up to 66 percent for companies younger than 2 years old, based on U.S. SBA statistics.


The government created the Small Business Administration in 1953 to help small businesses grow and get advice, according to the SBA website. The SBA also backs loans made by commercial lenders to entice them to lend. The guaranteed portion of SBA loans varies from year to year, but the SBA backs at least 75 percent of loans by approved institutions and this often goes up during recessions


Banks want an applicant to have a credit score above 700 and collateral to secure at least 10 to 20 percent of the loan and a solid business plan, according to William C. Deegan of the State University of West Georgia. New businesses should have a plan to get positive cash flow within six months, while existing companies need records that prove the company can afford loan payments.



Business Finance Solutions

Different sources may be appropriate for different stages of growth. Start-ups often rely on family members, friends, or local associates. As you grow, you may need to turn to alternate sources such as Venture Capital. Once you have achieved a financial track record, you can turn to other sources such as Asset Based Lending or Commercial Loans.

Here are the major business finance solutions available and when to use them.

Venture Capital

ne problem many new businesses face is raising sufficient capital. A business in its primary phase will also face a difficult challenge getting a bank loan. One alternative is venture capital.

Venture capital firms offer capital in exchange for equity in a company. This type of financing is ideal for new businesses since venture capital firms focus mainly on the future prospects of a company when banks use past performance as a primary criteria.

Asset Based Financing

In increasingly popular business financing solution is Asset based as a means of financing growth and providing working capital. Asset based financing is a general term whereby a lender accepts as collateral the assets of a company in exchange for a loan.

Most asset based loans are financed against accounts receivable and less often, against inventory since receivables are among the most liquid of a company’s assets followed by inventory. Receivables are favored by lenders since they self-liquidate in a short period of time by themselves and are not susceptible to problems such as shrinkage or physical damage.

Another type of asset based lending is factoring. Factoring is defined as the purchasing of a company’s accounts receivable on a non-recourse basis.

Asset based lending may be the best source of working capital for companies in turnaround where traditional bank loans may not be available or for new and rapidly growing companies where high levels of growth cause the business cycle to outpace the collection of receivables.

Long-Term Debt

Long-term debt is one of the initial financing avenues a company should pursue. Most long-term debt takes on the form of a loan where the interest and part of the principal are paid back in equal installments over the life of the loan. Sources for these business financing solutions include:

  • commercial banks
  • government sponsored loan programs
  • small business investment companies
  • private lenders

Lines of Credit

A line of credit loan is designed to provide short-term funds to a company in order to maintain a positive cash flow. Then, as funds are generated later in the business cycle, the loan is repaid.

This is a fairly popular business finance solution. Most commercial banks offer a revolving line of credit, where a fixed amount is available. As funds are used, the “credit line” is reduced and when payments are made, the line is replenished. One advantage of a line of credit is that the no interest is accrued until the funds are withdrawn, but the line is immediately available for the company’s cash flow needs.

Letters of Credit

A letter of credit is a guarantee from a bank that a specific obligation will be honored by the bank if the borrower fails to pay. Letters of credit are useful when dealing with new vendors who may not be assured of a company’s credit worthiness. The bank would offer a letter of credit as an assurance to the vendor of payment. Although no funds are paid by the bank, the credit requirements for a line of credit and a letter of credit are similar.

Loan Workouts

A loan workout is the process of repaying a problem loan in a fashion that is most agreeable to the lender and the company. Among the steps involved in a successful workout are maintaining communication with the lender, creating a revised payment schedule, and forming a workout team composed of the company’s management, representatives from the lending institution, and legal counsel to manage the process.

Unlike a traditional small business loan, one of the initial steps in workout proceedings is to recognize that repayment of the loan will not occur. The earlier the company recognizes that a problem exists, the greater their flexibility in dealing with the problem. Financial consultants who specialize in loan workouts are also available to coordinate the efforts of the company and the lender. These consultants can direct the workout team’s efforts and suggest solutions to the problem.

Floor Planning

Floor planning is another asset based lending approach in which companies can finance their inventories. In floor planning, inventory is financed based on the credit of the vendor as well as the company receiving the financing. The inventory purchased acts as collateral until the sale is made.

Small Company Offering Registration

Another type of equity financing is a small company offering registration or SCOR. Of the various business finance solutions available, this option is not as popular. Since there are laws governing private sales of securities, SCOR’s provide a means of selling common stock to the public. Companies can trade their common stock over the counter rather than deal with the difficulties that initial public offerings face.



What is the difference between accounts payable and accounts receivable?

Definition of Accounts Payable

Accounts payable is a current liability account in which a company records the amounts it owes to suppliers or vendors for goods or services that it received on credit.

Definition of Accounts Receivable

Accounts receivable is a current asset account in which a company records the amounts it has a right to collect from customers who received goods or services on credit.

Examples of Accounts Payable and Accounts Receivable

Let’s assume that Company A sells merchandise to Company B on credit (with payment due 30 days later). Company A will record the amount of the sale with a credit to Sales and a debit to Accounts Receivable. Company B will record the purchase (perhaps as inventory) with a credit to Accounts Payable.

When the amount of the credit sale is remitted, Company B will debit its liability Accounts Payable and will credit Cash. Company A will debit Cash and will credit its current asset Accounts Receivable.

Symmetry with Accounts Receivable and Accounts Payable
Our examples show that there are two sides to every transaction (which some people refer to as symmetry).
At the time of the sale:

  • Company A reported a sale and a current asset, and
  • Company B reported a purchase and a current liability

At the time of payment:

  • Company A’s Cash increased and its Accounts Receivable decreased
  • Company B’s Cash decreased and its Accounts Payable decreased

Balance Sheet: Retail/Wholesale – Corporation

What is a Hedge Fund?

A Hedge Fund is a fund established by one or several partners with net worth of at least $1 million (although this maybe falling). It uses long and short positions to take speculative positions in multiple markets simultaneously. (Regular equity funds are not allowed by law, to short securities.) Hedge funds use leverage and trade derivatives in order to maximize returns. After the leverage effect Hedge Funds command large amounts of resources. Their positions can significantly affect markets, particularly those markets that are relatively less liquid.


Hedge Fund have been playing a no-lose game

In the simplest strategy a hedge fund borrows Hong Kong dollars(HKD) and
then sells them in the market against USD, i.e., they short the HKD. Note that this will cause the money supply to shrink. A decrease in money supply leads to an interest rates increase. Increases in interest rates have several effects on the stock market. First borrowing HKD to buy stocks becomes more expensive. Hence fewer investors would use margin. Second, an increase in deposit interest rates will draw funds from stocks to deposits. Third, interest rate increases are negative for businesses and their value will go down. Again stocks decline.

On the other hand, higher interest rates lure more investors to park their money in Hong Kong, boosting the currency. But they also slam the stock market because rising rates hurt companies’ ability to borrow and expand. However, many of these Hedge Funds involved in the speculation did not operate in the cash market. instead they shorted the HKD in the futures markets. This does not require borrowing HKD. It is the counter party who has to hedge the long HKD position who needs to “borrow HKD” from the banking system. In the particular case discussed here Hedge Fund managers believed that they were taking little risk:

•  The hedge funds bet on the collapse of the peg. If the peg breaks, the HKD is expected to fall. Given the psychology of those days, the casual view was that the HKD was overvalued. The only risk to Hedge Funds is that the peg holds. Under these conditions their loss will be the difference between the initial cost of entering the trade to sell HKD in futures markets and the pegged rate. The reading suggests that this cost is low.



Hedge Fund enters contract to sell HK$ in six month’s. At expiration the Hedge Fund needs to buy spot HKD and delivered these against the short future’s position. If the peg holds the cost of replacing the HKD it has sold is essentially the 6 month differential between USD and HKD interest rates. On Thursday August, 20th the difference in inter-bank interest rates was about 6.3%, (Hong Kong rates being higher due to heavy demand for HKD loans, which are needed to short the currency.) So a hedge fund manager making a USD 1 million bet Thursday against the HKD would have paid USD 63,000. If the fund manager believed that the peg would break and thus the HKD depreciate, say, about 30%, then the potential profit would be USD 300,000. Compared to the cost of making the trade, USD 63,000 this is a good profit.


MA Intervenes

HKMA intervened to defend the peg. Using its own FX reserves, MA sold USD. Normally, when a country with a pegged currency spends reserves to defend the currency’s value, the intervention will have to be “sterilized”. In other words, the central bank would buy local currency bonds from the banking system so the purchase will be roughly in similar quantities so that the overall monetary base remains constant. However, doing this in Hong Kong at that time would result in further increases in interest rates. This would be considered as severely harmful by real estate companies in Hong Kong.

(Solved) During 2014, Pretenders Furniture Company purchases a carload

[Exercise 9.8]    Download Solution Now

During 2014, Pretenders Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Pretenders for a lump sum of $59,850 because it is discontinuing manufacturing operations and wishes to dispose of its entire stock. Three types of chairs are included in the carload. The three types and the estimated selling price for each are listed below.

During 2014, Pretenders Furniture Company purchases

During 2014, Pretenders sells 200 lounge chairs, 100 armchairs, and 120 straight chairs.
What is the amount of gross profit realized during 2014? What is the amount of inventory of unsold straight chairs on December 31, 2014?

Download Solution Now