Filing Your Taxes Late

Did You Miss the Filing Deadline? Don’t panic, here’s what you can do.

If you happened to miss the filing deadline, which this year (2018) was originally April 17th but extended to April 18 due to computer problems at the IRS, you should still try to file your income tax return as soon as possible, especially if you owe additional taxes. It is not as vital if the IRS owes you money, but is always better to get caught up as soon as possible, and do be aware that the IRS does have a statute of limitations on refunds.

If you owe taxes the longer you wait to file your tax return the more penalties and interest charges can build up, which will all have to be paid in addition to any money you already owe the IRS.
When you make no effort to pay your taxes, the IRS may levy/garnish your bank accounts and wages, or take other assets. The IRS in addition may file a Notice of Federal Tax Lien on a delinquent taxpayer which can have a negative impact on their credit rating.

If you are self-employed, failing to file a return can result in receiving no credits for Social Security benefits.
If you do not file your past due returns or pay your back taxes, the IRS can take further action against you. Continued non-compliance by flagrant or repeat non-filers could result in additional penalties and/or criminal prosecution as stated by the IRS.

Filing that late tax return can be easier than you think and avoid interest and penalties from piling up even more. You should file all tax returns that are due. If you do owe taxes, depending on your situation, you may qualify for an IRS payment plan/ installment agreement.

Safe, secure and convenient:  http://www.e-file-tax-returns.org/

There are many different ways to make a tax payment, credit card, check, money order, electronic funds transfer, and cashier’s check.

You can e-file your tax return up to 6 months after the original filing deadline. This gives the people who got a tax extension the opportunity to file online. After that date, which for 2018 is Monday, October 15th, the IRS shuts down the e-file server and begins preparing for the next tax filing season. Therefore, you will need to file a paper tax return beyond that point.

Special Situations for Late Tax Returns

If you are out of the country on the original April filing deadline, you are allowed to have 2 extra months to file your tax return and pay any tax due, though interest charges may still apply to any tax that isn’t paid by the April deadline.

Out of the country filers do not have to file a tax extension request (Form 4868) in order to receive these extra 2 months. The IRS defines “out of the country” as follows:

You live outside of the United States and Puerto Rico, and your main place of work is outside the United States and Puerto Rico.

OR

You are in military or naval service outside the United States and Puerto Rico.

Out of the country taxpayers who need more time to file (beyond the automatic 2-month extension) can request 4 additional months by filing a tax extension request (Form 4868) along with any taxes due.

Contribute to an IRA by April 17, 2018 and claim it for 2017

April 4, 2018

Anyone with an IRA may be eligible for a tax credit or deduction on their 2017 tax return if they make contributions by April 17, 2018. The IRS reminded taxpayers that it is not too late to contribute to an Individual Retirement Account (or Arrangement) (IRA) and still claim it on a 2017 tax return.

The majority of taxpayers who work are eligible to start a traditional or Roth IRA or add money to an existing account. Individual Retirement Accounts/Arrangements are designed to allow theses employees and people who are self-employed to save for retirement.

Contributions to a traditional IRA often are tax deductible, with distributions usually taxable. Contributions to a Roth IRA are not deductible, but qualified distributions are tax-free. To ne able to count for a 2017 tax return, contributions must be made by April 17, 2018. Additionally, low- and moderate-income taxpayers making such contributions could possibly also qualify for the Saver’s Credit.
Eligible taxpayers can generally contribute up to $5,500 to an IRA. For someone who was 50 years of age or older at the end of 2017, the limit is increased to $6,500. The same general contribution limit applies to both Roth and traditional IRAs. But, a Roth IRA contribution might be limited based on filing status and income. An person cannot make regular contributions to a traditional IRA in the year they reach 70½ and older, though they can still contribute to a Roth IRA and make rollover contributions to a Roth or traditional IRA regardless of their age.

If neither the taxpayer nor their spouse was covered for any part of the year by an employer retirement plan, they can take a deduction for total contributions to one or more traditional IRAs up to the contribution limit or 100 percent of the taxpayer’s compensation, whichever is less.

For 2017, if a taxpayer is covered by a workplace retirement plan, the deduction for contributions to a traditional IRA generally is reduced if the taxpayer’s modified adjusted gross income is between:
$0 and $10,000; married filing separately
$62,000 and $72,000; single and head of household
$99,000 to $119,000; married filing jointly or a qualifying widow(er)
$186,000 to $196,000; married filing jointly where the IRA contributor is not covered by a workplace retirement plan but is married to someone who is covered
The deduction for contributions to a traditional IRA is claimed on Form 1040, Line 32, or Form 1040A, Line 17.
Any nondeductible contributions to a traditional IRA must be reported on Form 8606.
Even though contributions to Roth IRAs are not tax deductible, the maximum permitted amount of these contributions is phased out for taxpayers whose modified adjusted gross income is above a certain level:
$0 to $10,000; married filing separately
$118,000 to $133,000; single and head of household
$186,000 to $196,000; married filing jointly
More detailed information on contributing to Roth or Traditional IRAs, refer to Publication 590-A, available on IRS.gov.
Saver’s Credit (also known as Retirement Savings Contributions Credit) is often available to IRA contributors whose adjusted gross income falls below certain levels. Eligible taxpayers get the credit even if they qualify for other retirement-related tax benefits. The Saver’s Credit (like other tax credits), can increase a taxpayer’s refund or reduce the taxes they owe. The amount of the credit is based on several factors, including the amount contributed to either a Roth or traditional IRA and other qualifying retirement programs.
For 2017, the income limit is:
$31,000; single and married filing separate
$46,500; head of household
$62,000; married filing jointly
Use Form 8880 to claim the Saver’s Credit, its instructions have details on figuring the credit correctly.

If you are under 7o years old and have an income under $65k you are eligible to file your tax return for free with e-file software. Secure, fast and simple! Come on over and try us! :

e-file-tax-returns.org

 

The Earned Income Tax Credit, EITC

The Earned Income Tax Credit, EITC

The Earned Income Tax Credit, EITC or EIC, is a benefit for working people with low to moderate income. To qualify for this credit, you must meet certain requirements and must file a tax return, even if you do not owe any tax or are not required to file. EITC can reduce the amount of tax you owe and may give you a refund.
If you claim the earned income tax credit (EITC) or the additional child tax credit (ACTC) on your tax return, the IRS must hold your refund until mid-February, including the portion not associated with EITC or ACTC. You may track your refund through the IRS.

Do you qualify?

To qualify for EITC you must have earned income from working for someone or from running or owning a business or farm and meet the basic rules. In addition you must also either meet additional rules for workers without a qualifying child or have a child that meets all the qualifying child rules for you.
There is an IRS link: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant ,  EITC Assistant to see if you qualify for tax years: 2016, 2015, and 2014. This link will help you find out your filing status, if your child is a qualifying child, if you are eligible and estimate the amount of the EITC you may get.
Use the EITC Income Limits, Maximum Credit Amounts and Tax Law Updates link for the current year, previous years and the upcoming tax year.

I Received an EITC Notice

The IRS does send letters about EITC that may include the following:

Suggest you claim EITC if you do qualify.
Ask you to send information to verify your EITC claim.
Provide important information about your claim.

Visit EITC Central  https://www.eitc.irs.gov/  for more tools and information. Then visit us at
http://www.e-file-tax-returns.org/ and let us help you complete your tax return from the privacy and convenience of your home computer!
We also have a Facebook page where you can find handy tips and deadlines https://www.facebook.com/freetaxreturninc/ , as well as a Twitter page https://twitter.com/Free1040Returns .
Please visit us today, we look forward to helping you!

Hurricane Harvey Hardship Loans

Sept 2017 The Internal Revenue Service announced that 401(k)s and similar employer-sponsored retirement plans can make loans and hardship distributions to victims of Hurricane Harvey and members of their families. Similar relief was provided last year to Louisians flood victims and victims of Hurricane Matthew.

Those who participate in 401(k) plans, employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities, and state and local government employees with 457(b) deferred-compensation pland may be able to take advantage of these loan procedures and liberalized hardship distribution rules. IRA participants are barred from taking out loans, but may be eligible to receive distributions under liberalized procedures.

Retirement plans can provide this relief to employees and certain members of their families who live or work in disaster areas affected by Hurricane Harvey and designated for assistance by (FEMA). For a complete list of eligible counties, visit https://www.fema.gov/disasters
Hardship withdrawals must be made by Jan. 31, 2018.