Tag Archives: tax day

3.31blog

Tips for the Tax Filing Procrastinator

Here’s some good news for all you tax filing procrastinators out there: Tax Day has been pushed back three days this year.

No joke—because Emancipation Day is being observed on Friday, April 15 this year, Tax Day has been moved to the following Monday, April 18.

So what will you do with these three extra days? That depends on your level of procrastination, of course. Here are the three most important things to consider if you’re filing your taxes at the eleventh hour:

  1. Do you owe money to the IRS or does the IRS owe you a refund?

If you don’t owe any money to the state or Federal government, then the April 18 deadline doesn’t apply to you. Yes, you heard that right. You will not incur a late filing penalty on your taxes if you’re owed a refund, so take a deep breath and stop stressing out. BUT (and this is important for people prone to procrastination) the longer you wait to file your taxes, the longer it will take to receive your refund. On top of that, you run the risk of becoming a victim of tax fraud the longer you wait to file, which is why we suggest filing as soon as you can. (If you file your taxes early, a fraudster can’t do it before you.)

  1. File an extension / Ask for payment installment plan

If you do owe the IRS money, you will incur late filing penalties on that amount unless you file for an extension. Even if you file for an extension, you will incur late payment penalties unless you pay at least 90 percent of your tax liability by April 18. Luckily, the process is fairly easy—fill out Form 4868 online or by mail and your new deadline will automatically be extended to October 17. Also, if you file on time but don’t think you’ll be able to pay the owed balance by the original deadline, you can request a short-term extension to pay the balance due or request an installment payment plan. This process requires a request be made by the deadline (check to see if your state requires a separate extension), but will give you time to get your finances in order.

  1. Don’t rush

The worst thing to do is try to beat the deadline without filing for an extension. Chances are you’ll overlook critical deductions and credits that may lower the amount you owe or increase your refund. There are a slew of life events that can affect your tax situation (e.g., marriage, divorce, starting a business, having a baby, etc.) and it would be a shame to ignore them, especially when it means more money coming out of your pocket.

For more info on how to avoid penalties that come along with missed tax deadlines, visit our Block Talk blog. In order to prevent winning the two-time tax procrastinator award, check out this handy infographic to find out what forms you’ll need, along with a tax prep checklist for next year’s prompt filing.

2.2-blog

Teens & Taxes: Spring Is Coming! But So Is Tax Day

Punxsutawney Phil’s declaration this morning that we’re in for an early spring may have you thinking of frolicking through dewy meadows, but don’t let that distract you from the upcoming tax deadline.

For 2016, that date remains fixed as April 18, despite what any rodent has to say about it.

With that sobering reminder, it’s a good idea for teens to learn the tax basics while still cooped up indoors. In the event your teen needs to file a return, getting the work done now during the winter months so one can relax in spring is a good idea.

Here are five important facts to help you understand taxes:

1.    What exactly are taxes?

Taxes are imposed on citizens by federal and state government bodies to finance various public services, such as transportation and infrastructure (think highway maintenance) and Social Security (monthly benefits to support the retired or eligibly disabled and their families) among other safety net programs. In essence, taxes help to support the country we live in.

2.    What’s the deal with Tax Day?

The chatter around Tax Day deals specifically with income tax, which is money deducted from paychecks and other forms of earned income, like investments. Typically on or before April 15, Americans must file a tax return, which notifies the government how much money individuals have earned over the past year and how much they’ve already paid the government through taxes. If you’ve paid more than required, you will receive a refund from the government. If you haven’t paid enough, then you’ll have to fork over extra cash.

3.     How did this all come to be?

A federal income tax was first imposed in the 1860s when the government needed money to fund the Civil War. Congress repealed this in 1872, but subsequent iterations of a federal income tax were imposed in large part to fund our military for protection from enemy nations. In 1913, the Sixteenth Amendment of the United States Constitution was ratified, decreeing Congress’s right to impose a Federal income tax.

 4.    Is paying taxes voluntary?

Simple answer: NO! Although the U.S. income tax system is defined as a voluntary system, reporting income your income to the IRS is mandatory. If you’re an income-earning resident of the United States or a nonresident with taxable U.S. earnings, you are required to pay your tax liability. No one is immune, not even the powerful and dangerous. Sure, Al Capone could get away with organized crime activity, but he couldn’t escape tax evasion. If you don’t pay the government, they will find out and collect their money, often with penalties and interest. In the most severe cases, criminal action can be taken against delinquents.

5.    But do I have to file a tax return?

Good question. That depends primarily on your age and income, along with some other factors. If you worked a job and had money taken from your check, you should file one because you may get money back. Read this earlier Dollar & Sense blog post for a more detailed explanation of whether or not teens have to file a tax return.

Understanding how to file a tax return can be complicated, which is why it’s beneficial to gain an understanding of the basics early on. It may not be everyone’s favorite, but it could be worse. You could be a groundhog tasked with crushing the warm-weather dreams of an entire country.