Anyone who conducts business in the corporate limits of the city of Ashland is required to file an income tax return with the city. This includes contractors, sole-proprietors, partnerships and corporations.
Please, remember to sign your income tax return. Unsigned returns will be given back to you. They are not considered filed until they are signed and returned to the city, and they may incur late fees and interest.
If you are starting a business in Ashland, you are required to fill out a Business Questionnaire. This short, one-page form contains questions about your business structure (individual, partnership or corporation). It also has basic questions about the nature of your business and your anticipated profits.
Contractors must also fill out an easy, one-page Contractor's Questionnaire. This form requests information about your business, job site address, employees and subcontractors.
If your business is located in Ashland, you must withhold municipal taxes from your employees' paychecks and remit them to the city, as of the first day they work for you. However, if your business is located outside of Ashland but your employees are working in Ashland, they may work 20 days or less in Ashland without needing to pay withholding to the city. However as of their 21st day working in the city, you are required to withhold and remit income tax to Ashland.
For the purposes of this rule, any portion of a day or any length of a shift counts as a whole day. For example, if someone works 4-hour shifts for 21 days in Ashland, their income is subject to city income tax even though they did not work full days.
Ashland income tax returns are due April 15, the same day as federal and state income tax returns. If April 15 falls on a weekend or holiday, the due date is the next business day.
If your business uses a fiscal year that is not the same as the calendar year, your return is due four months after the last date of your fiscal year. For example, if your fiscal year runs from Oct 1 to Sept 30, your return is due Jan 30.
The income tax return for the city of Ashland is a basic two-page form, but it requires information from your federal income tax return. Please attach copies of your Federal forms 1065, 1120, 1120S or 1041, as well as copies of your federal return schedules C, E and K.
The city of Ashland treats business losses slightly differently than the federal government. Luckily, the city's income tax return is structured in a way that makes it easy to address discrepancies between federal and municipal reporting requirements.
Namely, you cannot carry forward losses from one year to the next. If you claimed a business loss from a previous year against your current year's income on your federal return, you are not eligible to claim that loss on your Ashland return.
The rules for reporting rental losses on your local income tax return depend on whether you are a resident or a non-resident of Ashland.
If you are a resident of Ashland and you own multiple rental properties, you may offset rental income with rental losses, regardless of where your rental properties are located.
However, if you live outside of Ashland, you can only claim losses from rentals in Ashland. Non-residents cannot claim losses from properties outside of Ashland against their rental income earned in Ashland.
If you are a sole proprietor who has suffered losses, you can subtract the losses from your business income. However, you may not offset your W-2 income (employment income) with those losses.
If you are a shareholder in an S-corporation, you may claim gains or losses based on the percentage of the corporation you own.
If you withhold payroll taxes from your employees, you must submit an Employer's Monthly/Quarterly Return of Tax Withheld to the city.
Quarterly withholding is due 15 days after the end of each calendar quarter. For example, the first calendar quarter runs from Jan 1 to March 31, and withholding is due 15 days later on April 15.
If your quarterly payments exceed $200 per month, you must file monthly, and your due date is 15 days after the last day of the previous month. For example, January withholding is due Feb 15.
The late payment fee is 50 percent of the tax paid late, and unpaid tax is subject to interest. For example, if you owe $300, the late fee is $150, and interest is assessed on your unpaid balance from the date the taxes were due until the date they are paid.
To ensure your payments are correct, one a year, you must submit a withholding reconciliation. This is due by the last day of February. When submitting, W-2s for your employees, they must include your employee's name, address, Social Security Number, Medicare wages, local wages, and the names of other cities in which tax was withheld or should have been withheld.
Late reconciliation forms and late W-2's are charged a $25 late penalty per month up to $150.
Returned checks or ACH payments receive a $15 charge.
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