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May 2023 calendar

May 2023 Individual Due Dates

The month of May brings a flurry of activity in the tax world, especially for employees who receive tips and individuals with Individual Retirement Accounts (IRAs). Missing important deadlines during this time can lead to penalties and unwanted headaches. This article will equip you with the knowledge to navigate key tax deadlines for both employees and IRA owners, ensuring a smooth and stress-free tax filing experience.

Employee Tips and Reporting: Understanding the May 10th Deadline

Are you an employee who earns tips as part of your regular income? If so, the May 10th deadline is crucial for you. Here’s what you need to know:

  • Reporting Requirement: If you received more than $20 in tips during April, you are legally obligated to report them to your employer by May 10th. This reporting is done using IRS Form 4070.
  • Employer Withholding: Upon receiving your tip report, your employer is responsible for withholding FICA taxes and income tax from your regular wages. These withholdings cover the taxes owed on your reported tips.
  • Insufficient Wages, Uncollected Withholding: In situations where your regular wages are not enough to cover the tax withholdings for your tips, your employer will report the uncollected amount in Box 8 of your W-2 form for the year. This essentially means you’ll owe this uncollected tax amount when you file your tax return.

May 31st: A Date to Remember for IRA Owners

For individuals with IRAs, the May 31st deadline holds significance. Here’s why:

  • Form 5498 and Fair Market Value (FMV): By May 31st, your IRA custodian is required to issue you Form 5498. This form details the FMV (fair market value) of your IRA account as of December 31st of the previous year (in this case, December 31, 2022).
  • RMD (Required Minimum Distribution): The FMV on your IRA account on December 31st is crucial for determining your RMD (required minimum distribution) for the following year. If you are age 72 or older in 2023, you’ll be required to take out a minimum amount from your IRA based on this FMV.

Weekends, Holidays, and Disaster Relief: When Deadlines Shift

Tax deadlines don’t always fall on convenient weekdays. Here’s what to keep in mind:

  • Weekend or Holiday Deadlines: If a tax deadline falls on a Saturday, Sunday, or legal holiday, it is automatically extended to the next business day that’s not itself a holiday.
  • Disaster Relief Extensions: In times of disaster, the IRS recognizes the challenges taxpayers face. When a geographical area is designated as a disaster area, tax deadlines are typically extended.

For the latest information on disaster relief extensions and affected areas, you can visit the following websites:

  • FEMA (Federal Emergency Management Agency)
  • IRS (Internal Revenue Service)

By staying informed about these resources, you can ensure you’re taking advantage of any tax relief offered in case of a disaster.

Remember, meeting tax deadlines is essential to avoid penalties and interest charges. This article provides a foundational understanding of key tax deadlines for employees who receive tips and IRA owners. For specific tax advice or clarification on your unique situation, consulting with a qualified tax professional is always recommended.

JS Morlu LLC is a top-tier accounting firm based in Woodbridge, Virginia, with a team of highly experienced and qualified CPAs and business advisors. We are dedicated to providing comprehensive accounting, tax, and business advisory services to clients throughout the Washington, D.C. Metro Area and the surrounding regions. With over a decade of experience, we have cultivated a deep understanding of our clients’ needs and aspirations. We recognize that our clients seek more than just value-added accounting services; they seek a trusted partner who can guide them towards achieving their business goals and personal financial well-being.
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