As the year comes to a close, December is packed with critical tax deadlines and responsibilities for employers, corporations, and individual taxpayers. Staying organized during this busy period is crucial to avoid penalties and ensure compliance. Below is a detailed guide to the key dates and actions required for December 2024.
December 2: Employers – Update Employee Withholding Forms
Employers should remind employees to review their withholding allowances for 2025. If employees anticipate changes in their financial or personal circumstances, they should complete and submit a new Form W-4 (or Form W-4(SP) for Spanish speakers).
Updating withholding forms ensures accurate tax deductions for the upcoming year, preventing underpayment or overpayment of taxes.
Action Item: Distribute Form W-4 to employees and encourage them to review their tax withholding needs.
December 16: Key Tax Deposit Deadlines
Several tax deposit deadlines fall on December 16, primarily for those following the monthly deposit rule.
1. Social Security, Medicare, and Withheld Income Tax
Employers must deposit taxes withheld from employees’ wages in November, including Social Security and Medicare taxes.
2. Nonpayroll Withholding
For taxes withheld on nonpayroll items, such as pensions or annuities, deposits for November payments are due.
3. Corporations – Fourth Estimated Tax Payment
Corporations operating on a calendar year must make their fourth installment of estimated taxes for 2024.
Action Item: Ensure all deposits are submitted electronically to meet these deadlines and avoid penalties.
December 31: Year-End Deadlines
The last day of the year is critical for several tax and compliance-related actions:
1. Deductible Expenses for 2024
December 31 is the final day to pay deductible expenses for the 2024 tax return. This deadline does not include IRA, SEP, or Keogh contributions, which can be made after December 31, 2024.
Pro Tip: Plan ahead to ensure payments are processed by financial institutions or vendors before the end of the day.
2. Beneficial Ownership Reporting with FinCEN
For businesses created before January 1, 2024, this is the last day to file the initial Beneficial Ownership Report with the Financial Crimes Enforcement Network (FinCEN).
- The new Beneficial Ownership Information Reporting Rule requires certain entities—such as corporations, LLCs, and partnerships—to electronically report ownership details to FinCEN.
- Companies formed on or after January 1, 2024, will have 30 days from their creation date to file.
Failure to comply can result in significant penalties. For assistance, contact a professional familiar with the new reporting requirements.
3. General Year-End Caution
December 31 is often treated as a “catch-all” deadline for financial actions, but keep in mind that some tasks may require additional time due to institutional closures or processing delays. Plan ahead and take care of important tasks before the final day of the year.
Action Item: Ensure all year-end financial and tax-related activities are initiated early to avoid delays.
Important Notes for Deadlines
1. Weekend or Holiday Extensions
If a due date falls on a Saturday, Sunday, or legal holiday, it is automatically extended to the next business day.
2. Disaster Area Extensions
In federally declared disaster areas, tax filing and payment deadlines may be extended. To check if your region qualifies, visit:
How to Stay Prepared
The end-of-year tax rush can be overwhelming, but with proper planning, you can meet deadlines and avoid penalties. Here are some tips to stay ahead:
- Communicate with Your Team: Employers should proactively remind employees about Form W-4 updates and ensure tax deposits are scheduled.
- Consult a Tax Professional: If you’re unsure about any requirements, consulting a trusted tax advisor can save time and reduce stress.
- Utilize Online Tools: Use the IRS’s online payment and filing systems to meet deadlines efficiently.
- Track Upcoming Deadlines: Create a calendar or checklist to ensure all year-end tax tasks are completed on time.
December is a crucial month for staying compliant with tax obligations and setting the stage for a successful 2025. Whether you’re an employer, corporation, or individual taxpayer, taking action now will save time and prevent headaches in the new year.
Need Help?
At JS Morlu, we specialize in helping businesses and individuals navigate complex tax requirements. Contact us today for expert guidance and support.
By following these reminders and taking proactive steps, you’ll be well-positioned to wrap up 2024 smoothly and confidently step into the new year!
