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TaxMama’s TaxQuips End of Tax Season Payments and Tips

2017-04-17 by Eva Rosenberg

Today TaxMama® wants to talk about Extensions, Payments and End of Tax Season stuff.

Dear Friends and Family,

Today is April 17th. Don’t panic! Tax season isn’t quite over yet. You have until tomorrow to file your tax return or extension.  Here are some last minute tips.

But before I do, let me remind you (and pass this on those friends – you know who they are) that tomorrow is the absolute deadline to file the 2013 tax return and still collect a refund from the IRS. There’s a BILLION dollars sitting there, unclaimed.

OK – this year’s tips. (You may have heard or read them before.)

Do not file your tax return if you’re not totally ready with all the information. Get an extension. It’s free…sort of. Don’t just skip it until you’re ready. The penalty for filing late is 5% per month, up to 25%. The extension makes those penalties disappear.

To get an extension – use Form 4868 for personal extensions. Use Form 7004 to extend gift tax returns and trust or estate tax returns. Most states will accept the IRS extension. But make sure your state complies.

When you expect to owe money, but cannot pay it all, don’t lie on Form 4868. Enter the approximate balance you expect to owe. Pay at least $25 or $50 with the extension. (Never lie on the extension or it will be invalid.)

If you owe money, you need to pay it with the extension. You can use your credit card – and pay a fee.  Or you can pay online directly from your checking account with no fee using IRS’ Direct Pay. Make sure to select Form 4868 as the form and 2016 as the year you are paying.

If you absolutely cannot pay at this time because of a hardship, the IRS has a special form. Use Form 1127 to request an extension of time to pay for up to 18 months. There’s no guarantee they will accept it. But if they do accept this, you will avoid the late payment penalties. You will still owe the interest.

April 18th is also the last day to fund an IRA contribution for 2016.

And you need to make estimated tax payments for 2017, if you are self-employed or have investments. (Use the same payment links I gave you for the extension – just select Form 1040ES as the form – and use 2017 as the year.)

So you have a lot of demands on your money this week. What is the best strategy for allocating your dollars if your financial resources are limited? Read my 2012 Marketwatch column for guidance. The concepts and strategies are all still very valid. But use the links in today’s TaxQuip.

Please drop by MarketWatch.com and the TaxWatch columns for more tips.

To make comments and toss in your own ideas, please drop into the TaxQuips Forum.

And remember, you can find answers to all kinds of questions about tax payments and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]

Please post all Comments and Replies in the TaxQuips Forum.

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Getting Your Tax Return Done - in These Crazy Times

2017-03-13 by Eva Rosenberg

tax photo

Today TaxMama® wants to talk to you about getting your tax returns done – and where to get help.

 

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Dear Friends and Family,

It’s the height of tax season. And this year, there is a lot of confusion about a variety of issues. More than ever, you may need the help of a tax professional. Where can you get help preparing your tax returns?

Did you know that only 3 states actually have testing, licensing and continuing education requirements for tax professionals? Yup! Only California, Maryland and Oregon. The other 47 states, DC, and US territories have nothing. In fact, there are over 400,000 tax preparers registered to file tax returns electronically who are unregulated (over 57% of all preparers).

So how can you ensure that your tax professional IS a professional and is up-to-date on current tax laws, especially in states without licensing?

First, start with a credentialed tax professional – there are three: Enrolled Agents, Certified Public Accountants, and Tax Attorneys. Then there are the licensed tax pros in CA, MD and OR.

To encourage the uncredentialed tax pros to take classes and to stay up-to-date, the IRS established a voluntary program. After completing 16-18 hours of courses, and for some candidates, a 100-question annual examination, they can get an Annual Filing Season Program (AFSP) Record of Completion. Only 50,951 tax pros out of the 400,000 tax pros without credentials have taken the courses. That means, over half the tax pros in the country have no license, and might not have bothered to keep up with changing tax laws.

The IRS’s directory of tax professionals will help you look up your tax pro. You will be able to see if their license, credential or AFSP is in good standing. You will be able to locate them by name or ZIP code. But you will not find and address or contact information for them. (The 350,000+ unlicensed and un-AFSP’d tax pros are not in the directory.) https://irs.treasury.gov/rpo/rpo.jsf

How do you find the right person to help you? And which is right for you?

Enrolled agents (EAs) are tax specialists licensed to represent taxpayers before the IRS. The EA credential allows them to work anywhere in the nation. For tax planning and tax debt issues, bookkeeping and payroll, this is your best choice. You can find them at the National Association of Enrolled Agents (NAEA), http://taxexpert.naea.org/

Certified public accountants (CPAs) are authorized to perform certified audits and issue financial statements. If you have a complex business and need much more than just tax returns – work with a CPA. You can find them the American Institute of Certified Public Accountants (AICPA), http://www.aicpa.org/feedback/shortfb.htm

Tax Attorneys are excellent choices if you need to create trusts, set up contracts and minutes, or deal with courts or criminal issues. They are usually too expensive for routine tax returns. You can find them at the American Bar Association http://www.americanbar.org

To decide if you’re better off preparing your own tax return, or working with a tax pro, read chapters 3 and 4 of Deduct Everything! http://deducteverythingbook.com/

If you’re in business, you will find more details about building an advisory team in chapter 1 of Small Business Taxes Made Easy. http://yourbusinessbible.com/

Please drop by MarketWatch.com and the TaxWatch columns for more tips.

To make comments and toss in your own ideas, please drop into the TaxQuips Forum.

And remember, you can find answers to all kinds of questions about tax filing and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]

Please post all Comments and Replies in the TaxQuips Forum.

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TaxMama’s TaxQuips Highlights of Trump Tax Plan

2016-11-09 by Eva Rosenberg

Today TaxMama® wants to give you an advance peek on what you can expect from a Donald Trump tax plan, coming to a Congress near you!

To read the details, please drop by here:
TaxMama.com

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He Who Hesitates is Lost - or - Expired Refunds

2016-08-09 by Eva Rosenberg

busy Today TaxMama® hears from several people in the TaxQuips Forum with questions about expired refunds. Let me summarize. “I faced a hardship and didn’t file tax returns for several years. Now, I learn that I cannot get my refunds for all those years. Can you help?”

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Dear Friends and Family,

My answers to Dustin and to DParker don’t bring much hope.

They do have heartbreaking stories. And I truly wish I had a solution.

But here’s the problem. Even the IRS doesn’t have discretionary control over this matter. These r[s3audio s3url=”http://taxmama.audioacrobat.com/download/taxmama-Expired_Refunds.mp3” /]efunds that have expired, due to the statute of limitations, are controlled by laws passed by Congress – they folks you vote for. You need to get in touch with your legislators to get them to make the law more sympathetic.

The tax code doesn’t provide a way to get those refunds from closed years. When we talk about a ” statute of limitations,” the word “statute” means LAW – in this case IRC 6511.

For future reference, please don’t put off filing your tax returns – no matter how sick or depressed you are. Family and friends, please keep an eye on those you love and help file their tax returns. They don’t need to be totally accurate. If some information is frustratingly elusive – make good estimates and attached a statement to the tax return that this has been done. After all, you have three years to correct the tax return. In the meantime, you save the refund for that year – which would otherwise be lost forever.

What can you do if it IS lost? There IS one thing I would try. You have nothing to lose.
Contact the Taxpayer Advocate Service and see if there is any way they can help you. Sometimes, in extreme situations, they can pull a rabbit out of a hat. And their service is free. I truly wish you-all luck!

To see the rest of this discussion, please drop into the TaxQuips Forum.

And remember, you can find answers to all kinds of questions about unfiled tax returns and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]

Please post all Comments and Replies in the new TaxQuips Forum

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Wasted Refunds

2016-04-04 by Eva Rosenberg


stevepb / Pixabay

Today TaxMama® wants to bring wasted refunds to your attention. The IRS keeps sending out announcements that refunds are expiring. People keep ignoring those announcements, thinking that this doesn’t apply to them.

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Last week’s TaxWatch column at MarketWatch.com tells some stories of people who lost their refunds because…shrug, I just can’t be bothered to file right now.
Please – read that column and pass it on to your friends or family members who aren’t filing.

Let me tell you another story – about someone making close to minimum wage, who also just didn’t bother. One day, this fellow got disabled. He wasn’t in a position to collect either disability or unemployment (OK…through sheer stupidity.) But we were able to persuade him to catch up on his previously un-filed returns (there were at least 7 years unfiled). For the years that were still open, we were able to get him quick refunds of over $3000 . But…for the other years…all gone. And let me tell you, when you are unemployed, sick and have no income coming in, that lost $4000 can make a big difference! It took another 2-3 years before he was able to resolve his medical issues and start getting SSI and VA help. (Don’t ask.)

Every tax professional I know has more stories. So do I…like the doctor living in his car with his two children; or the dementia victim whose bank moved and he couldn’t pay his mortgage or file his taxes, or…folks who will break your heart.

Please, don’t be one of those statistics. Please, FILE YOUR UNFILED RETURNS! Or help someone you love catch up.

Remember, you can find answers to all kinds of questions about tax refunds and other tax and business issues, free. Where? Where else? At www.TaxMama.com.

And Remember, if YOU have questions, please post them into the TaxQuips Forum – just click on Ask A Question. (Family members – use this.)

[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]

Download the MP3 (0:00min, 3MB) or listen now...

Ask TaxMama
Where Taxes are Fun
TaxQuips
The #1 Free Tax Podcast Online
TaxQuips Forum
Where you can you ask your tax questions
TaxMama's TaxQuips
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