As we approach the final stretch of tax season, maintaining compliance and avoiding unnecessary penalties requires attention to specific dates. For our clients in Burlingame and the greater Bay Area, March serves as a critical checkpoint to assess where your individual returns stand before the April deadline.

March 10: Reporting Tips to Employers

While this deadline primarily affects employees in the service industry, it is a necessary compliance step for any family members entering the workforce or for clients with business interests in the hospitality sector.

If an employee received more than $20 in tips during February, these must be reported to the employer by March 10 using IRS Form 4070. The report must include the employee’s name, address, Social Security number, the employer’s name, the period covered, and the total tips received.

Employers are responsible for withholding FICA and income taxes on these reported tips. If regular wages are insufficient to cover these withholdings, the uncollected amount will appear in Box 8 of the W-2, requiring the taxpayer to settle the balance when filing their annual return.

March 16: Finalizing Your Filing Strategy

We are now approximately one month away from the April individual income tax deadline. If you have not yet scheduled a time to discuss your return or forwarded your documents to our office, we strongly advise doing so now.

Please do not delay simply because you are waiting on a single document. At Sullivan & Company, we prefer to review the information you currently have. We can easily create a list of open items to address later. This allows us to begin the foundational work on your return immediately.

The Role of Extensions in Wealth Planning

For high-net-worth individuals and complex estates, filing an extension is often a strategic necessity rather than a delay tactic. It ensures accuracy in complex valuations and reporting. However, an extension to file is not an extension to pay.

It is vital that we prepare a preliminary return to estimate your tax liability. This allows you to pay any tax due by the April deadline, thereby minimizing interest and penalties, while we finalize the intricacies of your return.

Note on Weekends & Holidays
If a statutory due date falls on a Saturday, Sunday, or legal holiday, the deadline is automatically pushed to the next business day.

Disaster Area Relief
The IRS frequently adjusts deadlines for areas designated as disaster zones. To check if your region qualifies for an extension, please reference the official resources below:

• FEMA: https://www.fema.gov/disaster/declarations
• IRS: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations