Posts Tagged ‘2014.Tax.Season’

You Filed That Extension, And Only Now Are Realizing the Deadline is Wednesday…

Sunday, October 12th, 2014

Yes, only three days are left until the extension deadline. If you file on October 16th, it’s as if you never filed that extension (you will owe a 22.5% late filing penalty). So what should you do if you’re just starting on your return now?

First, in most cases tax professionals say it’s better to extend than amend. But extending is now out [1], so it’s better to get a reasonable return in. It can’t be a frivolous return: If you file a frivolous return, it’s even worse than not filing–you can get hit with a penalty for filing a frivolous return.

1. Get your documents together. If you have them, wonderful. If not, on Tuesday [2] you can use the IRS’s “Get Transcript” application to hopefully download a Wage & Income Transcript.

2. Include all of your income: Interest, dividends, rental real estate, gambling wins, etc. Just because you don’t receive a 1099 doesn’t mean you get to exclude that income! If you’re using software, carefully enter it where it belongs. Software does a great job putting numbers where you tell it to, but it’s also garbage in, garbage out.

You can download forms off the IRS’s website.

3. After you complete your return, look it over to make sure it’s reasonable.

4. If you live in a state with a state income tax, you have to file that too. And if you have a municipal or school district income tax, that’s also due. Most jurisdictions do have forms online.

5. If you’re filing electronically, keep the proof of filing. If you’re mailing your return, go to the post office or an automated postal center and spend the $5 on certified mail, return receipt requested. If your tax return is postmarked on October 15th, it’s considered timely filed. Certified mail gives you that proof. The automated postal centers can issue certified mail, and the postmark is the local time–even if the mail is picked up the next day (a very useful thing if you’re preparing your return at 11pm on October 15th).

6. If you’re thinking about calling up a tax professional, you need some luck. Most of us are quite busy dealing with our current procrastinating clients; October 13th is just not the time for a new client meeting.

7. Finally, make a vow with yourself that you will get started far sooner next year. While the 2015 Tax Season will likely be very unpleasant [3] and will probably start late [4], you should be able to get your returns started before October 1.


1. A few individuals can file a request for a second extension. If you were outside of the US on April 15th and will be outside of the US on October 15th (and both are for business/employment/residency purposes), you can file a request for a second extension. Phil Hodgen wrote about this last year (the rules haven’t changed).

2. The IRS, in its unending wisdom, has an annual “outage” of all computer systems on Columbus Day Weekend. Yes, all IRS computers are turned off just days prior to the extension tax deadline. If you’re scratching your head about this, well, so am I.

3. Next year features the first year of ObamaCare reporting, extender legislation that will probably pass late (see #4 below), and the IRS’s budget continues to shrink.

4. Congress has done nothing on “Extenders” but almost certainly will following the November election. IRS Commissioner Koskinen warned of issues if legislation passes late. Well, it will pass (in some form) late. Will it pass on January 1, 2015? I hope not, but if the Republicans gain control of the Senate (which wouldn’t occur until 2015; the Democrats will still run the Senate in the “lame duck” session), the Senate might work well or might not work at all. If you’re getting the idea that the 2015 Tax Season won’t be fun, that’s my view.

2014 Tax Season to Begin on January 31st

Wednesday, December 18th, 2013

The IRS announced today that 2013 personal tax returns will begin to be accepted on January 31st. Since most states piggyback onto the IRS’s computer system, most state returns can also begin to be filed on January 31st.

The 2013 tax season began on January 30th on a limited basis; it took the IRS several weeks before they could accept all returns. It appears that this coming year the full tax season will open at the end of January, so that’s a plus in comparison to the most recent tax season.

Of course, most taxpayers will be unable to file until later in the year. The deadline for issuing W-2s and most 1099s is also January 31st. However, brokerage account 1099s do not have to be issued until February 18th this year (the 15th falls on a Saturday, the 17th is President’s Day, so the deadline gets moved back three days). Additionally, the IRS routinely grants extensions to brokerage firms that need more time. Unfortunately for preparers, that has led to tax season being more and more compressed each and every year. I doubt the upcoming tax season will be any different.

For our clients, we plan on beginning distribution of Organizers and related documents next week.

Sigh: 2014 Tax Season to be Delayed up to Two Weeks

Tuesday, October 22nd, 2013

Just the news that every tax professional wants to hear: The 2014 tax season (2013 tax returns filed next year) will be delayed one to two weeks. It appears the start date for processing will be sometime between January 28th and February 4th (instead of January 21st).

The IRS gives as the reason the government shutdown and I have no doubt they’re correct. In prior years, I remember that all IRS computer systems going down on Columbus Day weekend (which is a federal holiday) to begin updating the IRS computer systems for the next year’s filing season. This didn’t happen this year as the employees who would have done that work weren’t working. So I do think the IRS is behind, and that this is a direct result of the shutdown.

This will be the second straight tax season that begins late. The just concluded tax season began late because Congress didn’t enact needed legislation until January 1, 2013. Unfortunately, there’s a chance that the upcoming tax season could be delayed even further if the government shuts down again. The current funding will run out on January 15, 2014. I don’t expect that to happen…but we’re dealing with Congress and, well, we’ve seen them in action (or is it “in inaction”) before.