News | Nesteggg Accounting

What If I don’t file by the end of the day today?

If you do not pay the full amount you owe by the tax deadline, even if you file an extension, you will be assessed a penalty of 0.5% of your balance due per month or part of a month after the deadline. The amount of your failure-to-pay penalty will not exceed 25% of your back taxes.

What happens if you miss the tax extension deadline?

If you miss both the April 15 and October 15 tax filing deadlines and are owed a refund, chances are that nothing will happen to you. In fact, the IRS will more than likely deduct any interest and penalties you owe from that refund. It is up to you then to file and claim that refund if you want it.

Can I file a second extension on my taxes?

In general, you can‘t file a second extension. … Once upon a time you could request a second extension (Form 2688) until mid-October if you couldn’t file by the first extension’s mid-August deadline. In 2005, the IRS eliminated the second extension and updated the first extension deadline (Form 4868) to October 15.

What happens if you miss the tax deadline 2019?

If you haven’t paid at least 100 percent of the tax you owe by April 15, 2019 you‘ll end up owing a late payment penalty of 0.5 percent per month until the tax is paid. The maximum late payment penalty is 25 percent of the amount due. You‘ll also owe interest on whatever amount you didn’t pay by April 15.

Can I still file my taxes after deadline?

For those who didn’t file by the April deadline.There is no penalty for filing late if a refund is due. Penalties and interest only accrue on unfiled tax returns if taxes are not paid by April 15, the tax filing deadline this year in most states.

Taxpayers who donate to charity should check out these resources

Taxpayers who donate to a charity may be able to claim a deduction on their tax return. These deductions basically reduce the amount of their taxable income. Taxpayers can only deduct charitable contributions if they itemize deductions.

Here are some resources for people making donations:

Tax Exempt Organization Search
Taxpayers must give to qualified organizations to deduct their donations on their tax return. They can use this tool to find out if a specific charity qualifies as a charitable organization for income tax purposes.

Publication 526, Charitable Contributions
This pub explains how taxpayers claim a deduction for charitable contributions. It goes over:

How much taxpayers can deduct.
What records they must keep.
How to report contributions.

Publication 561, Determining the Value of Donated Property
Taxpayers generally can deduct the fair market value of property they donate. This publication helps determine the value of donated property.

Form 8283, Noncash Charitable Contributions
Taxpayers must file form 8283 to report noncash charitable contributions if the amount of this deduction is more than $500. The instructions for this form walk taxpayers through how to complete it.

Schedule A, Itemized Dedications
Taxpayers deducting donations do so on Schedule A. The instructions for this form include line-by-line directions for completing it.

Frequently asked questions: Qualified charitable distributions
Taxpayers age 70 ½ or older can make a qualified charitable distribution from their IRA – up to $100,000 – directly to an eligible charity. It’s generally a nontaxable distribution made by the IRA trustee to a charitable organization. A QCD counts toward their minimum distribution requirement for the year.

More information:
Tax Topic 506 – Charitable Contributions
Deducting Charitable Contribution at a Glance

The child tax credit benefits eligible parents

Taxpayers who claim at least one child as their dependent on their tax return may be eligible to benefit from the child tax credit. It’s important for people who might qualify for this credit to review the eligibility rules to make sure they still qualify. Taxpayers who haven’t qualified in the past should also check because they may now be able to claim the credit.

Here are some details about this credit:

The maximum amount of the credit is $2,000 per qualifying child.
Taxpayers who are eligible to claim this credit must list the name and Social Security number for each dependent on their tax return.
The child must be younger than 17 on the last day of the tax year, generally Dec 31.
The child must be the taxpayer’s son, daughter, stepchild, foster or adopted child, brother, sister, stepbrother, stepsister, half-brother or half-sister. An adopted child includes a child lawfully placed with them for legal adoption. They can also include grandchildren, nieces or nephews.
The child must have not provided more than half of their own support for the year.
The taxpayer must claim the child as their dependent on their federal tax return.
The child cannot file a tax return for the same year with the status married filing jointly, unless the only reason they are filing is to claim a refund.
The child must be a U.S. citizen, a U.S. national or a U.S. resident alien.
In most cases, the child must have lived with the taxpayer for more than half of 2019.
The IRS Interactive Tax Assistant tool Is My Child a Qualifying Child for the Child Tax Credit? helps taxpayers determine if a child qualifies for this credit.
In some cases, a taxpayer qualifies and gets less than the full credit. These taxpayers must have earned income of at least $2,500 to receive a refund, even if they owe no tax, with the additional child tax credit.
The credit begins to phase out at $200,000 of modified adjusted gross income. This amount is $400,000 for married couples filing jointly.
Taxpayers can use the worksheet on page 6 of Publication 972, Child Tax Credit, to determine if they can claim this credit.

Taxpayers whose dependent does not qualify for this credit might be able to the claim the credit for other dependents.

A Brief History of the Buck

It may seem like the dollar – the U.S. currency – has been around forever. But in our country’s infancy we had a different currency called the Continental currency, or Continentals. And even before Continentals, the colonies issued their own currency to finance things like military campaigns, buildings, and pay government officials and the like. Also, bills of credit were issued by the government and by the states. Those were, in essence, promises to pay a debt. There was not much coinage (actual coins made of metal) minted by the U.S. in those early years.

The Continental

Continentals were issued by Congress in large part to fund the Revolutionary War against the British. When Congress deemed it needed more money for the war, it printed and circulated more Continentals. Thus, by the time the war was winding down there was too much paper currency and bills of credit in circulation. There was also a problem of counterfeit currency on the market. And by that time, Continentals were worth almost nothing.

Many attempts were made to shore up the currency to no effect. When the Continental Congress then ratified the Constitution, it included language prohibiting the states from issuing their own currency, limiting the number and type of currency in circulation. An attempt also was made to take old currency out of circulation in order to make what was left more valuable. However, none of these efforts worked effectively.

After the Revolutionary War wrapped up Congress appointed a Superintendent of Finance to monitor monetary policy and a few years later the U.S. authorized a new currency, the U.S. Dollar.

Pieces of Eight

Why “dollar” and not “pound”? We were a British colony after all. Well before and during the war, much of the coinage in circulation were Spanish pesos and eight of them were called a dollar (pieces of eight refers the fact that Spanish currency is divisible by eight). In fact, most of the coinage circulating of the time was from somewhere else, not minted here. Thus, when it came time to create a national currency, Congress chose a moniker that was already in circulation. Fun fact: the Spanish dollar was still legal tender in the U.S. up until 1857.

Back when the Continental Congress ratified the Constitution it also included language that connected the dollar to the value of gold and silver. And our dollar was backed by gold and/or silver for a long period of our history until 1971 when our currency fully became fiat currency rather than currency backed by commodity.

What is the difference you may ask. Commodity currency is backed by a thing of value, like gold or silver. But, if your currency is backed by a thing – even if that thing is shiny and pretty and worth a lot – there are only so many of those things. And if you come to the end of your things to back your currency then you must limit growth. Or worse, devalue your currency.

Gold Standard

The U.S. dollar being backed gold and silver is not as straight a line as some may believe. At times of war and heavy financial pressure the government could and did issue treasury bonds backed only by the government. Fun Fact: for a long time one could take one’s dollar bills into the Federal Reserve bank or one of the Regional Reserve banks and request they be exchanged for gold or silver. In 1900 silver was detached from it and only gold was used to back the dollar. There were several variances in the valuation of a dollar linked to gold until finally in 1971 the dollar was allowed to become fiat currency.

A fiat currency, which most of the world’s currencies now are (remember our discussion of Bitcoin?), is backed by an entity. In our case, the dollar is backed, as it states on bills by “the full faith and credit” of the U.S. So, now instead of things of value determining how much our currency is worth, the stability of the entity determines (among many other factors) the value of the dollar. This is where the Federal Reserve comes in. As the central bank of the U.S. it alone determines monetary policy and thus how much cash and debt is in the market at any given time.

Reminder: Oct. 15 deadline approaching for taxpayers who requested extensions

Taxpayers who requested the six-month filing extension should complete their tax returns and file on or before the Oct. 15 deadline. Convenient electronic filing options, including IRS Free File, are still available.

Filing electronically is easy, safe and the most accurate way to file taxes. There are a variety of electronic filing options. Those options include having tax returns prepared at a Volunteer Income Tax Assistance or Tax Counseling for the Elderly site, purchasing commercial software or choosing a reputable tax professional who is also an authorized e-file provider.

About 15 million taxpayers filed for an extension this year. Although Oct. 15 is the last day for most people to file, some may have more time. They include:

Members of the military and others serving in a combat zone. They typically have 180 days after they leave the combat zone to file returns and pay any taxes due.
Taxpayers in federally-declared disaster areas who already had valid extensions. For details, see the disaster relief page on IRS.gov.

Extension filers can file when they are ready and don’t have to wait until Oct. 15 to file. Taxpayers who did not request an extension and have yet to file a 2018 tax return can generally avoid additional penalties and interest by filing the return as soon as possible and paying any taxes owed.

New Form 1040
Form 1040 has been redesigned for tax year 2018. The revised form consolidates Forms 1040, 1040A and 1040-EZ into one form that all individual taxpayers will use to file their 2018 federal income tax return.

The new form uses a “building block” approach that can be supplemented with additional schedules as needed. Taxpayers with straightforward tax situations will only need to file the Form 1040 with no additional schedules. People who use tax software will still follow the steps they’re familiar with from previous years. Since nearly 90 percent of taxpayers now use tax software, the IRS expects the change to Form 1040 and its schedules to be seamless for those who file electronically.

Recordkeeping and adjusted gross income
As a reminder, taxpayers should keep a copy of their tax returns and supporting documents for a minimum of three years. Some taxpayers using a tax-filing software product for the first time may need their adjusted gross income amount from their prior-year tax return to verify their identity.

Taxpayers using the same tax software they used last year will not need to enter their prior year information to electronically sign their 2018 tax return. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

Payment options
IRS Direct Pay offers taxpayers a fast way to pay what they owe. Direct Pay is free and allows individuals to securely pay their tax bills or make quarterly estimated tax payments online directly from checking or savings accounts without any fees or pre-registration.

Taxpayers can also pay by debit or credit card. While the IRS does not charge a fee for this service, the payment processer does. Other payment options include the Electronic Federal Tax Payment System (enrollment is required) and electronic funds withdrawal which is available when e-filing. Taxpayers can also pay what they owe using the IRS2Go mobile app. Those choosing to pay by check or money order should make the payment out to the “United States Treasury.”

Eligible taxpayers can set up an online payment agreement in a matter of minutes to pay tax, interest and penalties they may owe. There is no application fee to setup payment plans lasting 120 days or less. In 2019, over 1 million agreements were set up by taxpayers online.

Individual taxpayers can go to IRS.gov/account and login to view their balance, payment history, pay their taxes and access tax records through Get Transcript. Before setting up an account, taxpayers should review Secure Access: How to Register for Certain Online Self-Help Tools to make sure they have the information needed to verify their identities.

Prepare for next year − Do a ‘Paycheck Checkup’ now
The IRS also urges extension filers to do a “Paycheck Checkup” now. It helps make sure the right amount is being withheld from their checks following tax reform. If a change is needed, there’s still time to adjust withholding during the last quarter of the year.

Taxpayers can use the Tax Withholding Estimator to approximate their 2019 income taxes and proper withholding. The tool compares the estimate to current withholding to help taxpayers decide if they want to change that amount with their employer. Taxpayers should have their 2018 tax return available when using the tool to estimate income, deductions, adjustments and credits for 2019. They will also need their most recent pay stub to compute the amount of withholding so far this year.

With major changes made by the Tax Cuts and Jobs Act, the IRS encourages taxpayers seeking more information on tax reform to review Publication 5307, Tax Reform: Basics for Individuals and Families, and Publication 5318, Tax Reform What’s New for Your Business. For other tips and resources, visit IRS.gov/taxreform. The IRS reminds taxpayers they have a variety of options to get help filing and preparing their tax returns on IRS.gov, the official IRS website. Taxpayers can find answers to their tax questions and resolve tax issues online. The Let Us Help You page helps answer most tax questions, and the IRS Services Guide links to these and other IRS services.

What If I don’t file by the end of the day today?

Taxpayers who donate to charity should check out these resources

The child tax credit benefits eligible parents

A Brief History of the Buck

Reminder: Oct. 15 deadline approaching for taxpayers who requested extensions

Stay Connected

Get in Touch

constant contact