The IRS has opened the 2024 filing season for tax year 2023 returns. Whether you file as a sole proprietor, S-Corp, partnership, or C-Corp, there are specific changes and deadlines you should have on your radar before you start. Here is your filing season guide.
Key Deadlines
March 15: S-Corp (Form 1120-S) and partnership (Form 1065) returns are due, or file Form 7004 for an automatic six-month extension. April 15: Individual returns (including Schedule C sole proprietors), C-Corp returns (Form 1120), and Q1 2024 estimated tax payments are due. If you file for an extension, remember that it extends the filing deadline, not the payment deadline. Tax owed must be paid by the original due date to avoid penalties and interest.
What Changed for 2023 Returns
Bonus depreciation dropped to 80%. If you placed business assets in service during 2023, the first-year bonus depreciation rate is 80%, down from 100% in 2022. Plan accordingly for equipment purchases and coordinate with Section 179 for optimal results.
R&D amortization continues. The requirement to amortize research and development costs over five years (domestic) or fifteen years (foreign) remains in effect for 2023. This increases taxable income for R&D-intensive businesses compared to the pre-2022 immediate deduction.
Standard mileage rate increased. The business standard mileage rate for 2023 is 65.5 cents per mile. If you use the standard mileage method, ensure you apply the correct rate and maintain a contemporaneous mileage log.
Common Mistakes to Avoid
Late K-1 distribution to partners and shareholders is one of the most common problems. If you are a pass-through entity, your investors and owners need K-1s to file their individual returns. Get them out by March 15 or communicate the expected timeline.
Misreporting estimated tax payments is another frequent issue. Reconcile your quarterly payments (dates and amounts) against IRS records before filing. Discrepancies delay processing and can trigger notices.
Get Organized
Gather all 1099s, W-2s, K-1s, and bank statements. Reconcile your bookkeeping against your bank accounts. Ensure your depreciation schedules are current. If you have not reconciled your books for 2023, do that before handing anything to your preparer. Clean books lead to accurate returns and lower preparation costs.