'Tis the Season to Wrap Up the Tax Year


‘Tis the season to wrap up your 2016 tax year. Read below for what a person’s or business’ tax responsibility may be for the last month of the year – December. Hopefully you will have time to enjoy the holiday festivities, before you have to close out your tax year.


December Tax Due Dates for an Individuals

December 1 – Time for Year-End Tax Planning

December is the month to take final actions that can affect your tax result for 2016. Taxpayers with substantial increases or decreases in income, changes in marital status or dependent status, and those who sold property during 2016 should call for a tax planning consultation appointment.

December 12 – Report Tips to Employer

Are you an employee who works for tips? Did you receive more than $20 in tips during September? Then you must report the tips to your employer on IRS Form 4070 no later than November 10. Your employer has to withhold FICA and income taxes for these tips from your regular wages. If your regular wages are not enough 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 need 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 2016. 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 2016

Last day to pay deductible expenses for the 2016 return (doesn’t apply to IRA, SEP or Keogh contributions, all of which can be made after December 31, 2016). Taxpayers who are making state estimated payments may find it advantageous to prepay the January state estimated tax payment in December (Please call the office for more information).

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 Tax Due Dates for a Business

December tax dues dates aren’t something you would be giving thanks for. But when it comes to your business make sure you read these below:

December 1 – Employers

During December, ask employees whose withholding allowances will be different in 2017 to fill out a new Form W4 or Form W4(SP).

December 15 – Social Security, Medicare and Withheld income tax

Make it a point to file the Form 941 for the third quarter of 2016. This due date applies only if you deposited the tax for the quarter in full and on time.

December 15 – Nonpayroll Withholding

If the monthly deposit rule applies, deposit the tax for payments for November.

December 15 – Corporations

The fourth installment of estimated tax for 2016 calendar year corporations is due.

December 31 – Last Day to Set Up a Keogh Account for 2016

If you are self-employed, December 31 is the last day to set up a Keogh Retirement Account if you plan to make a 2016 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.

Do Not Miss the December Tax Deadlines.

Do you have any questions about all of this? Call Alex Franch, BS EA at 781.849.7200. He can answer any questions you may have. Alex is an enrolled agent with the IRS. He can guide you through the reporting deadlines that may apply to you or your business.

Sources and Resources:

For more information, call Alex Franch at 781.789.7200. WorthTax has locations in Norwell, Dedham, and Weymouth, Massachussetts.
Alex Franch

Mr. Franch is a Tax Specialist and Partner at Joseph Cahill & Associates / WorthTax. He has a diverse background including a Bachelor of Science from Boston College in Mathematics and extensive military service. Mr. Franch is an Enrolled Agent and has eight years of tax preparation experience. He has been serving individuals, families, and businesses for several years with tax and financial planning strategies and is a junior partner with the firm. Mr. Franch is licensed by the Financial Industry Regulatory Authority (FINRA) with a Series 6, 63, 65, and 7, and by the Commonwealth of Massachusetts Division of Insurance.