Frequently Asked Questions

The following are answers to questions we hear most often. Don't see your question listed? Book a time to talk with us or submit it for us to review.

 
 

When is the filing deadline for my individual income tax return?

Whether you’ll be filing your Federal tax return or Federal extensions, both are due April 18th, 2017. You did not read this wrong, the deadline is indeed April 18th. Why? Because April 15th, 2017 falls on a Saturday this year, and with the observance of Emancipation Day on Monday April 17th, you will have an additional 3 days to gather and collect your documents for the April 18th filing!

What is an extension? Will I get audited because I filed an extension?

Do you need more time to file your tax return? Well don’t panic! Filing an extension may be the best route for you. The IRS and state authorities understand how hectic tax filings can be and do allow taxpayers who cannot gather all their information in time to file an automatic 6 month extension. Your return will have an extended filing due date of October 16th, 2017 (because October 15th falls on a Sunday this year).

Do I have to pay quarterly estimated taxes? How are they calculated?

Are you self employed, a partner in a partnership, a majority shareholder in an S-corporation, invest significantly in different financial instruments and have made income for the year? If you answered yes to any of the above, it is very likely that you will need to make quarterly federal and state estimated tax payments.

Why should I pay my quarterly estimated tax payments? Can I skip paying them?

We understand that cash flow is very important for any new business, so how much trouble will you get with the IRS if you do not make your quarterly estimated tax payments? No you will not go to jail, the IRS will not seize your funds, but if you do not withhold enough or pay in enough you will be subject to interest and underpayment penalties on both the federal and state level at the time you file your return.

How do I calculate my estimated tax?

Your estimated tax due depends on a multitude of factors needed to be considered to arrive at your taxable income and tax liability for the year. To figure your estimated taxes we will need to calculate your expected adjusted gross income (AGI), taxable income, deductions, and credits for the year.

Why should I calculate estimated taxes?

For any startup, we fully understand that income fluctuates year to year, month to month, and even day to day. Estimated tax calculations will give you a better idea of how much you will owe each quarter as well as for the tax year. The general population usually doesn’t like to hear from their accountants because the call/email/meeting typically comes with a surprise, and a big one, your tax balance due! Accountants generally tell you to pay your estimated tax calculations to avoid penalties and interest but Timber thinks that they are important to help your business to plan not only for cash flow but to benefit from any additional deductions/credits you may be eligible for. Should you purchase a new car? To figure your estimated tax, you must figure your expected adjusted gross income, taxable income, taxes, deductions, and credits for the year.

When are my 2016 4th quarter estimated taxes due?

Your Federal and state 2016 4Q estimates are due January 17, 2017. However, some clients may benefit from “pre-paying” their state estimate by December 31, 2016. This will require us to do a projection on both your 2016 and 2017 tax liability to see the benefit of making this payment in 2016 or 2017..

How do I calculate my estimated tax?

Your estimated tax due depends on a multitude of factors needed to be considered to arrive at your taxable income and tax liability for the year. To figure your estimated taxes we will need to calculate your expected adjusted gross income (AGI), taxable income, deductions, and credits for the year.

When are estimated tax pyaments due for tax year 2017?

1st quarter - April 17th, 2017 2nd quarter - June 15th, 2017 3rd quarter - September 15, 2017 4th quarter - January 15, 2018

Are my HSA contributions tax deductible?

Yes - HSA contributions (out of pocket contributions) are 100% tax-deductible and reduces your gross income dollar for dollar on your tax return. The 2016 limits are $3,350 for individuals and $6,750 for family, and if you 55 or older, you can an additional $1,000. You can expect to receive a “Form 1099-SA” which reports your deductible contributions for the tax year. Please retain this form and provide it to your tax professional.