FEDERAL DEPOSIT DUE DATES

FORM                                         PERIOD                                                          2005 DUE DATES

 940                       For tax year 2004 with undeposited taxes of $100 or less                                           January 31

 941                       For tax year 2004 if all taxes were deposited when due                                              February 10

1096                       For tax year 2004 NOTE: the electronic filing due date is Mar. 31                              February 28 

W-3                        For tax year 2004 NOTE: the electronic filing due date is Mar. 31                              February 28

941                         For first quarter 2005 (1/1 - 3/31)                                                                           May 2

941                         For first quarter 2005 (1/1 - 3/31) if all taxes were deposited when due                    May  10    

941                         For second quarter 2005 (4/1 - 6/30)                                                                       August 1

941                         For second quarter (4/1 - 6/30) if all taxes were deposited when due                         August 10  

941                         For third quarter 2005 (7/1 - 9/30)                                                                          October 31

941                         For third quarter 2005 (7/1 - 9/30) if all taxes were deposited when due                    November 10

941                         For forth quarter 2005 (10/1 - 12/31)                                                                       January 31, 2006

941                         For forth quarter 2005 (10/1 - 12/31) if all taxes were deposited when due                 February 10, 2006

2005 FICA CHANGES

• The 2005 social security wage base for self-employed individuals is $90,000.
• Social security tax remains at 12.4%.
• There is no Medicare wage limit, and the Medicare tax remains at 2.9%.
• The tax applies to the net earnings from self-employment.

IRS UPDATE

More Small Businesses File Schedule C-EZ

The Internal Revenue Service says it will expand the number of small businesses eligible to file a simplified expense form, a move that it says will save money and reduce the paperwork burden. The IRS will double the business expenses threshold to $5,000 from 2,500 for filing the Form 1040, Schedule C-EZ.

H.R. 4306,

Allows both written and electronic signatures on Employment Eligibility Verification Forms (Forms I-9).

IRS INTENDS TO KEEP "DEPENDENT" DEFINITION.

The definition of "dependent" in §152 was amended by §201 of the WFTRA, effective for taxable years beginning January 1, 2005. As amended, a dependent must be either a "qualifying child" or a qualifying relative," in accordance with §152.

DE MINIMIS FUTA TAX DEPOSIT THRESHOLD INCREASED.

Effective January 1, 2005, employers are required to make a quarterly Federal Unemployment Tax Act (FUTA) deposit if their accumulated tax liability exceeds $500 a quarter.

2005 BUSINESS MILEAGE RATE INCREASED TO 40.5 CENTS.

This three-cent increase, over the 2004 rate of 37.5 cents, is the largest one-year increase ever, due mainly to higher vehicle and fuel prices.

FEDERAL UPDATES

• The 2005 social security wage base is $90,000. May change hour.
• Form 941 was completely redesigned for 2005.
• Use the new Schedule D to report wage, tax, and payment discrepancies between Forms 941 and W-2 caused by acquisitions, statutory mergers, or consolidations.

ACCOUNTING SYSTEMS 

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