Taxpayers who received an extension to file their 2018 tax return might have questions. They should remember that help is just a few clicks away on IRS.gov. Here are some of the tools and resources they may find useful. [Read more…]
IRS: Rushing to file taxes can result in errors, use e-file, file extension if needed
As the April tax-filing deadline nears, many taxpayers may rush to finish their tax returns or find they need extra time to get them done.
The IRS recommends that taxpayers file for an extension if they need one. Filing an extension will help taxpayers avoid paying penalties for filing a late return. Extensions provide more time to file, but not more time to pay any tax owed.
The deadline to file 2018 individual tax returns and pay taxes owed is Monday, April 15, 2019, for most taxpayers. Because of the Patriots’ Day holidays on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17, 2019, to file their tax returns.
Mistakes can happen when hurrying to file a tax return by the due date. This can mean longer processing times and possible tax refund delays. Electronic filing is the best way to avoid common mistakes and file the most accurate tax return; it is also the most accurate way to file a tax return. The IRS estimates that about 70 percent of taxpayers can file their tax return at no charge by using IRS Free File software.
Follow these tips to avoid common tax-filing errors:
Prepare before you start. Gather all your documents such as Forms W-2 and 1099, gather your supporting tax deductions or credits such as state tax or mortgage interest payments. Find your prior-year tax return, you may need it. Make sure you have your dependents’ Social Security numbers. Because the standard deduction has increased this year, many taxpayers may determine itemizing deductions is no longer necessary.
File electronically. Filing electronically reduces common tax return errors. And, taxpayers who use software benefit because it does the calculations, flags possible mistakes and prompts taxpayers for missing information.
Double check bank routing and account numbers. Requesting direct deposit of a federal tax refund into one, two or even three accounts is convenient and allows the taxpayer access to their money faster. Make sure the financial institution routing and account numbers entered on the return are accurate. Incorrect numbers can cause a refund to be delayed or deposited into the wrong account.
Find adjusted gross income. Taxpayers who changed tax software products may be asked to enter their prior-year adjusted gross income as part of the electronic signature process. Taxpayers who did not retain a copy of their prior-year tax return may have to use Get Transcript Online or Get Transcript by Mail to obtain their prior-year AGI.
Keep a copy of the return. Taxpayers should make a copy of their signed tax return and all schedules and keep these records in a safe place. Tax returns should be retained for three to six years depending on the complexity.
Additionally, taxpayers who choose to file a paper return should remember the following:
- Everyone will file Form 1040. IRS reminds taxpayers that 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.
- Mail a paper return to the right address. Paper filers should check their tax form instructions for the appropriate address to avoid processing delays. Taxpayers can also look up where to file on IRS.gov.
- Take a close look at the tax tables. When figuring tax using the tax tables, taxpayers should be sure to use the correct column for the filing status claimed.
- Fill in all requested information clearly. When entering information on the tax return, including Social Security numbers, take the time to be sure it is accurate and easy to read. Also, check only one filing status and the appropriate exemption boxes.
- Review all figures. While software catches and prevents many errors on e-filed tax returns, math errors remain common on tax returns prepared by hand.
- Sign and date the return. If filing a joint tax return, both spouses must sign and date the return.
- Attach all required forms. Attach W-2s and other forms and schedules to the tax return to the front of their tax returns that reflect tax withholding. If requesting a payment agreement with the IRS, also attach Form 9465, Installment Agreement Request, to the front of the return. Attach all other necessary schedules and forms to the upper right-hand corner of the tax form in the order shown in the instructions.
For taxpayers who cannot meet the April deadline, requesting a filing extension is easy and will prevent late-filing penalties. Taxpayers who need more time to file should follow these tips:
Request a filing extension. The easiest way to file an extension is to use IRS Free File. All taxpayers are eligible to use Free File to file a Form 4868. Simply review the Free File extension offers and select the software program of choice.
Automatic extensions with payments. Other fast, free and easy ways to get an extension include using IRS Direct Pay, the Electronic Federal Tax Payment System or by paying with a credit or debit card. There is no need to file a separate Form 4868 extension request when making an electronic payment and indicating it is for an extension. The IRS will automatically count it as an extension. But keep in mind that while an extension grants additional time to file, tax payments are still due by the April deadline.
Alternatively, taxpayers may file Form 4868, Application for Extension of Time to File U.S. Individual Income Tax Return, electronically or by mail.
Do a ‘Paycheck Checkup.’ The IRS recommends that everyone do a paycheck checkup early in 2019. It is especially important for anyone with a tax bill when they file their return, but it’s also important for anyone whose refund is larger or smaller than expected. By changing withholding now, taxpayers can get the refund they want next year. For those who owe, boosting tax withholding early in 2019 is the best way to head off a tax bill a year from now. In addition, taxpayers should always check their withholding when a major life event occurs or when their income changes.
The Internal Revenue Service today advised taxpayers that the doubling of the standard deduction due to tax law changes is likely to reduce the number of taxpayers who normally itemize.
This is the sixth in a series of reminders to help taxpayers Get Ready for the upcoming tax filing season. The IRS has recently updated its Get Ready page with steps to take now for the 2019 tax filing season.
In previous years, about one out of three taxpayers itemized. The IRS expects that number to be less for tax year 2018. The Tax Cuts and Jobs Act (TCJA) passed in December 2017, significantly affects deductions in several ways, impacting those taxpayers who normally itemize.
The TCJA doubles the standard deduction amount for all filing statuses. The standard deduction is a dollar amount that reduces the amount of income on which a taxpayer is taxed and varies according to their filing status. Because of this, many qualifying taxpayers may find the increased standard deduction more than their total itemized deductions and opt for choosing the standard deduction rather than itemizing.
Taxpayers should check their 2017 itemized deductions to make sure they understand what the tax reform changes could mean for their tax situation in 2018. Those who still plan to itemize will complete an updated version of Schedule A, Itemized Deductions, and attach it to their tax return.
Publication 5307, Tax Reform Basics for Individuals and Families, is a key resource to understanding the impact of the tax reform law on deductions. The publication provides information about:
- increasing the standard deduction,
- suspending personal exemptions,
- increasing the child tax credit,
- adding a new credit for other dependents, and
- limiting or discontinuing certain deductions.
The IRS reminds taxpayers that the best way to file an accurate tax return is to use tax software and e-file or seek the help of a tax professional who will prepare and e-file their tax return. The IRS offers tips for choosing a tax professional.
Taxpayers who earned less than $66,000 in 2018 may qualify for IRS Free File and can access no cost tax software online.
The IRS Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs offer those taxpayers who earned less than $55,000 in 2018 free face-to-face tax return preparation and free e-file from IRS-trained volunteers. For more information and locations, go to IRS.gov/VITA.
Monday, October 15, 2018, is the extension deadline for most taxpayers who requested an extra six months to file their 2017 tax return.
For taxpayers who have not yet filed, here are a few tips to keep in mind about the extension deadline and taxes:
- Try IRS Free File or e-file. Taxpayers can still e-file returns for free using IRS Free File. The program is available only on IRS.gov. Filing electronically is the easiest, safest and most accurate way to file taxes.
- Use direct deposit. For taxpayers getting a refund, the fastest way to get it is to combine direct deposit and e-file.
- Use IRS online payment options. Taxpayers who owe taxes should consider using IRS Direct Pay. It’s a simple, quick and free way to pay from a checking or savings account. There are other online payment options.
- Don’t overlook tax benefits. Taxpayers should be sure to claim all entitled tax credits and deductions. These may include income and savings credits and education credits.
- Keep a copy of the tax return. Taxpayers should keep copies of tax returns and all supporting documents for at least three years. This will help when adjusting withholding, making estimated tax payments and filing next year’s return.
- File by October 15. File on time to avoid a potential late filing penalty.
- More time for the military. Military members and those serving in a combat zone generally get more time to file. Military members typically have until at least 180 days after leaving a combat zone to both file returns and pay any tax due.