December 1 - Time for Year-End Tax Planning
December is the month to take final actions that can affect your tax result for 2020. Taxpayers with substantial increases or decreases in income, changes in marital status or dependent status, and those who sold property during 2020 should call for a tax planning consultation appointment.
December 10 - Report Tips to Employer
If you are an employee who works for tips and received more than $20 in tips during November, you are required to report them to your employer on IRS Form 4070 no later than December 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.
December 31 - Last Day to Make Mandatory IRA Withdrawals Last day to withdraw funds from a Traditional IRA Account and avoid a penalty if you turned age 70½ before 2020. If the institution holding your IRA will not be open on December 31, you will need to arrange for withdrawal before that date. December 31 - Last Day to Pay Deductible Expenses for 2020 Last day to pay deductible expenses for the 2020 return (doesn’t apply to IRA, SEP or Keogh contributions, all of which can be made after December 31, 2020). December 31 - Caution! Last Day of the Year If the actions you wish to take cannot be completed on the 31st or a single day, you should consider taking action earlier than December 31st.
December 2020 Business Due Dates
December 1 - Employers
During December, ask employees whose withholding allowances will be different in 2021 to fill out a new Form W4 or Form W4(SP).
December 15 - Social Security, Medicare and Withheld Income Tax
If the monthly deposit rule applies, deposit the tax for payments in November.
December 15 - Nonpayroll Withholding If the monthly deposit rule applies, deposit the tax for payments in November. December 15 - Corporations The fourth installment of estimated tax for 2020 calendar year corporations is due. December 31 - Last Day to Set Up a Keogh Account for 2020 If you are self-employed, December 31 is the last day to set up a Keogh Retirement Account if you plan to make a 2020 Contribution. If the institution where you plan to set up the account will not be open for business on the 31st, you will need to establish the plan before the 31st. Note: there are other options such as SEP plans that can be set up after the close of the year. Please call the office to discuss your options. December 31 - Caution! Last Day of the Year If the actions you wish to take cannot be completed on the 31st or a single day, you should consider taking action earlier than December 31st.
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