Posts Tagged ‘2018.Tax.Season’

Tax Deadline Extended One Day for IRS Purposes

Tuesday, April 17th, 2018

The IRS announced late today that due to the computer issues with IRS Direct Pay and the IRS e-filing systems, that individuals and businesses with a tax deadline of today (April 17th) have an extra day, until midnight, April 18th. Here is the IRS announcement:

WASHINGTON — The Internal Revenue Service announced today that it is providing taxpayers an additional day to file and pay their taxes following system issues that surfaced early on the April 17 tax deadline. Individuals and businesses with a filing or payment due date of April 17 will now have until midnight on Wednesday, April 18. Taxpayers do not need to do anything to receive this extra time.

The IRS encountered system issues Tuesday morning. Throughout the system outage, taxpayers were still able to file their tax returns electronically through their software providers and Free File. Taxpayers using paper to file and pay their taxes at the deadline were not affected by the system issue.

“This is the busiest tax day of the year, and the IRS apologizes for the inconvenience this system issue caused for taxpayers,” said Acting IRS Commissioner David Kautter. “The IRS appreciates everyone’s patience during this period. The extra time will help taxpayers affected by this situation.”

The IRS advised taxpayers to continue to file their taxes as normal Tuesday evening – whether electronically or on paper. Automatic six-month extensions are available to taxpayers who need additional time to file can visit https://www.irs.gov/forms-pubs/extension-of-time-to-file-your-tax-return.

It is likely that most states will conform to this extension (California has already announced that they will).

IRS Direct Pay Down

Tuesday, April 17th, 2018

It’s not as if today is a big day, right? IRS Direct Pay is down. This is not impacting most tax professionals efiling and initiating direct debit (the information is being sent to our software providers), but it is causing an issue for the public. If you cannot use it, you can always pay by check and voucher (Form 1040-V). If you mail a check, make sure to use certified mail, return receipt requested.

Annual Blog Hiatus

Friday, March 16th, 2018

With the heart of the 2018 Tax Season upon us, it’s time for my annual blog hiatus. My series of Bozo Tax Tips will appear in early April, and if something truly earth-shattering happens in tax, I’ll still be here. Otherwise, I’ll be back post-April 17th.

S-Corp/Partnership/1042 Deadline Is Tomorrow

Wednesday, March 14th, 2018

Tomorrow is the deadline for calendar-year S-Corporations and partnerships to file their tax returns. In reality, most will file extensions. But let’s say you’re an S-Corp (or partnership) owner and you just realized there’s a deadline. What should you do?

“It’s better to extend than amend.” And the penalties for not filing an extension are, as President Trump would say, bigly.

That’s the answer–file an extension. Download Form 7004, follow the instructions, and mail the form using certified mail, return receipt requested, to the IRS. Or file your extension electronically.

Remember your state taxes. Some states have an automatic extension; some require a form to be filed. A few, such as Illinois and New York, have taxes on partnerships or S-Corporations. If you don’t know your income, make an estimate of what it is, calculate the tax, and send that with your extension.

The deadline is a postmark deadline, so as long as the extension is postmarked tomorrow you’re fine. If you are in an area hit by the recent winter storms (mainly in the northeast and mid-Atlantic), you have an extra five days (until March 20th) to file your extensions (or returns).

Tomorrow is also the deadline to file Forms 1042-S and 1042 with the IRS. These are reports of withholding to non-Americans. If you need to file those forms, make sure you get that done by tomorrow, too.

The deadline for individual tax returns, trust/estate returns, and calendar year C-Corporations is Tuesday, April 17th.

The Good, Bad, and Ugly of the Tax Extenders

Thursday, February 22nd, 2018

As write this it’s February 21st. About ten days ago Congress, in its unending wisdom, decided to extend certain “Tax Extenders” that they had let expire at the end of 2017. Yes, the undead have risen again! As soon as the IRS allows it, these are back for 2017. You can find a complete list of the extenders here. The major ones that impact individuals are:

– Exclusion from gross income of discharge of qualified principal residence indebtedness
– Mortgage Insurance premiums treated as qualified residence interest
– Tuition and Fees deduction
– Certain energy credits.

Of course, there are some esoteric deductions and credits like the American Samoa economic development credit and that certain race horses are now classified as three-year property.

The Good: The IRS has already implemented a couple of these items. I can already efile returns with mortgage insurance, and tomorrow I’ll be able to efile returns with the tuition and fees deduction. That’s also great work by my software provider (ProSeries).

The Bad: Sooner or later the bill comes due. As Samuel Johnson said, “Whatever you have, spend less.” That’s something that both Democrats and Republicans in Congress need to learn. Our government, at almost all levels, is bloated and needs to be cut. It would also be nice if Congress either codified these extenders into law permanently, extended them timely, or just ended these items.

The Ugly: If you are taking one of those esoteric deductions or credits, you may need to wait a while before filing your return. The IRS is starting with the more popular (as far as implementing the extenders), so for those taking the carbon dioxide sequestration credit, you may need to file an extension; as always, it’s far better to extend than amend.

Overall, kudos to the IRS for quickly implementing many of these extenders. And for those of you who take the excise tax credit on alternative fuels are happy, too.

Driver’s Licenses and Tax Filings

Monday, February 5th, 2018

Nevada Driver's License

Many states are now requiring we obtain your driver’s license information (or state ID) in order to file your return. Currently, these states are requiring this information:

– Alabama
– California
– Colorado
– Illinois
– Kansas
– Louisiana
– New York
– Ohio
– Virginia
– Wisconsin

States are using this in order to combat identity theft. So if you are filing one of these state’s tax returns, your tax professional will need your driver’s license number, date the driver’s license was issued, and the expiration date. (If the driver’s license or state ID is from New York, the first three characters of the New York document number will also be needed.)

While I’m generally for anything that reduces identity theft, I’m not thrilled with this. Of course, I should point out that this adds extra work for tax professionals which just might be why I have this opinion….

January 31st Tax Deadlines: 2016 Hurricane Extensions and Information Returns

Wednesday, January 24th, 2018

We’re one week away from the first tax deadline of the 2018 Tax Season along with the final tax deadline for filing 2016 tax returns.

Taxpayers on extension for filing 2016 tax returns because of Hurricanes Harvey, Irma or Maria have until next Wednesday, January 31st, to file their 2016 tax returns. Those tax returns can either be mailed, or beginning this coming Monday (January 29th) they can be electronically filed. This extension also holds for taxpayers impacted by the Northern California wildfires.

FBAR filers on extension because of Hurricanes Harvey, Irma, or Maria have until next Wednesday, January 31st, to file their 2016 FBARs. Those returns must be efiled through the BSA efiling system. This extension also holds for taxpayers impacted by the Northern California wildfires.

The deadline for mailing out most 1099s to recipients is next Wednesday, January 31st. That’s a postmark deadline, not a receipt deadline.

The deadline for filing 1099-MISC’s showing “Nonemployee Compensation” (box 7) with the IRS is next Wednesday, January 31st. Those 1099s can either be mailed (if mailed, Form 1096 must be included as a cover page) or efiled (if you’re an authorized e-filer of information returns) through the IRS FIRE system.

IRS Announces Tax Filing Season Begins January 29th

Thursday, January 4th, 2018

The IRS today announced that the 2018 Tax Filing Season will begin on Monday, January 29th. This year’s deadline for individual returns is Tuesday, April 17th.