Businesses can heave a sigh of relief now that April 18 has passed and this year’s main IRS deadline has passed. But the fact is, keeping up with tax filing requirements is a year-round job.
The recent deadline of May 15 was the date for not-for-profit organizations with a calendar year-end to file their 2016 return or to request a six-month extension to file.
To help ensure that you don’t miss any upcoming 2017 major tax deadlines, here’s a look at deadlines for some key tax-related forms, payments and other actions. Keep in mind that this list is not all-inclusive, so there could be additional deadlines that apply to you. At the end of the list, we’ll include tips about which documents you should keep — and for how long — so that you’ll be ready if the IRS auditors should come calling.
Tax deadlines for the rest of 2017
June 15: The second quarterly estimated tax payment for 2017 is due.
July 31: Companies operating on a calendar-year-end basis must file a Form 5500, reporting on their employee benefit plans. Other deadlines apply to companies not on a calendar-year-end basis.
- Calendar-year-end S-corporations that obtained an extension earlier this year must file their 2016 tax return.
- Calendar-year-end partnerships that obtained a six-month extension must file their 2016 tax return.
- Companies with an IC-DISC must file the IC-DISC return.
- The third quarterly estimated tax payment for 2017 is due.
Oct. 1: Calendar-year-end trusts and estates (Form 1041) that obtained a 5.5 month extension must file their 2016 tax return.
- Calendar-year-end C-corporations that obtained a tax extension earlier this year must file their 2016 tax return.
- Sole proprietors and self-employed persons who obtained a six-month extension must complete and file their 2016 personal tax returns.
- Not-for-profit organizations with a calendar year end that obtained a six-month extension earlier this year must file their 2016 return.
- Companies operating on a calendar-year basis that obtained an extension on their Form 5500, which reports on their employee benefit plans, must file by this date.
Dec. 15: The fourth quarterly estimated tax payment for 2017 is due (C-corporations only).
Tips on retaining records
Business representatives frequently want to know how long they should save tax returns and supporting documents. Businesses retain these documents for a number of reasons, and some documents are legally required to be maintained for a specified period of time. Other documents are critical in supporting accurate accounting records and some are retained for knowledge transfer when there is a turnover in staffing. These needs must also be balanced against the organization’s physical and electronic storage capabilities.
When preparing the business’s record retention and document destruction policy, management should:
- Begin by determining what types of documents the organization has. These may include employee records, accounting records, tax records, board minutes, email communications, department policies, and federal or non-federal grants and contracts.
- Research whether any document types are governed by federal, state, local or international statutes.
- Describe not only the system for filing and maintaining the documents but also the process for destroying documents once the established time period has passed. If the document is confidential, a secure method to shred physical documents must be established. Examples of confidential documents are those that may contain social security numbers, dates of birth or bank account information.
- Identify the person within the business who is responsible for the different types of documents.
- The organization may choose to designate one person in the accounting department for retaining accounting records and another within the human resources department for maintaining employee personnel records.
- Create a process to review all retained documents and establish their destruction timeline. Ensure that documents are destroyed on time. If documents are not destroyed, they are legally discoverable if the business is sued.
- Assign a retention period for each type of document. For some documents, professional judgement must be used. Typical retention periods include:
— Three years: Employee applications, I-9 forms, and cash and credit card receipts
— Seven years: Contracts, journal entries, employee offer letters and invoices
— Permanent: Corporate documents, IRS application for tax-exempt status, IRS determination letter, annual audits and IRS form 990 tax filings
By adopting these retention policies, a business can protect its valuable reputation, be more efficient in making decisions, detect fraud in a timely manner, and protect the business from knowledge loss and excess liability. The IRS also offers guidelines on records retention.
Justin W. Follis is a shareholder with the LBMC tax practice. He has more than 13 years of experience in taxation and consulting multi-national corporations and partnerships in tax compliance and other areas. He can be reached at 865-862-6532 or firstname.lastname@example.org.
Originally printed in The Tennessean.