Written by: Scott Strohecker, EA
Benjamin Franklin is famously quoted as saying “Nothing is certain except death and taxes.” While this seems to hold true, the first Federal income tax in the United States dates back to the Civil War. To help pay for the war, President Abraham Lincoln announced the new income tax during his first year in office.
Today’s tax system comes from the passing of the 16th Amendment in 1909. The 16th amendment gave Congress the authority to enact an income tax. While there have been a lot of changes and a couple major overhauls of the tax system over the last century, taxes don’t seem to be going anywhere.
With everyone’s favorite day of the year less than a month away (Tax Day), there are some important deadlines to be aware of. This article reviews four important dates you should know.
Historically, Tax Day is thought of as April 15th. However, this year’s tax deadline is April 18th due to April 15th falling on a Saturday and the next business day, Monday April 17th, is Emancipation Day, which is a District of Columbia local holiday which the IRS observes and closes for.
Therefore by April 18th, you must file your tax return electronically, postmark a paper return, or request an automatic extension. On top of that, you must pay any taxes due by April 18th to avoid any late payment penalties.
By April 18th, you can also make contributions to a traditional IRA, Roth IRA, SEP IRA, Health Savings Account (HSA), or solo 401(k) plan for the 2022 tax year.
If you need to make estimated payments for 2023, your 1st quarter estimated payments are due.
While federal taxes often get all the attention, it is important to remember about state taxes as well. While some states do not require you to file a separate state extension, others do, especially if you owe state tax. New York, for example, will grant you an automatic extension if you apply for it using Form IT-270. Be sure to check with your applicable state to find out what their requirements are.
Estimated payments for the 2nd quarters are due.
Estimated payments for the 3rd quarters are due.
If you filed for an extension, you have until October 16th to file your federal and state returns.
While it is very important to be aware of these deadlines, what you do as far as tax planning between the deadlines and throughout the year is even more important. It is never too late to start getting a handle on your taxes and begin planning. If you have any questions regarding tax deadlines and tax planning, please contact our team to set up an initial meeting.
Bouchey Financial Group has offices in Saratoga Springs and Historic Downtown Troy, NY, and Boston, MA.