Extension filers can avoid making these common filing errors

The IRS has issued a notifications for taxpayers who filed for an extension of time, that they have until Oct. 15 to submit their tax return. To make sure they meet their tax obligations, taxpayers should file accurate tax returns. If a taxpayer makes an error on their tax return, it will likely take longer to process and could delay a refund. Taxpayers can avoid many common errors by filing electronically, the most accurate way to file a tax return. All taxpayers can e-file using IRS Free File or Free File Fillable Forms.

Here are common errors for taxpayers to avoid when preparing their tax return:

  • Missing or inaccurate Social Security numbers. Taxpayers should be sure to enter each SSN on a tax return exactly as printed on the Social Security card.
  • Misspelled names. People should double check to make sure they spelled all names listed on a tax return exactly as listed on the taxpayers’ Social Security cards.
  • Filing status. Some taxpayers claim the wrong filing status, such as Head of Household instead of Single. The Interactive Tax Assistant on IRS.gov can help taxpayers choose the correct status. E-file software also helps prevent mistakes.
  • Math mistakes. Math errors are common, ranging from simple addition and subtraction to more complex items. Figuring the taxable portion of a pension, IRA distribution or Social Security benefits is more difficult and results in more errors. Taxpayers should always double check their math. Better yet, tax preparation software does it automatically.
  • Figuring credits or deductions. Taxpayers can make mistakes figuring their Earned Income Tax CreditChild and Dependent Care Credit, the standard deduction and other items. Follow the instructions carefully. For example, a taxpayer who’s 65 or older, or blind, should claim the correct, higher standard deduction, if not itemizing. The IRS Interactive Tax Assistant can help determine if a taxpayer is eligible for tax credits or deductions.
  • Incorrect bank account numbers. Taxpayers who are due a refund should choose direct deposit for ease and convenience, but the IRS cautions taxpayers to use the correct routing and account numbers on the tax return.
  • Unsigned forms. An unsigned tax return isn’t valid. Both spouses must sign a joint return; an exception may apply for some members of the military. Taxpayers can avoid this error by filing their return electronically and digitally signing it before sending it to the IRS. Taxpayers who are using a tax software product for the first time will need their adjusted gross income from their 2016 tax return to file electronically. Taxpayers who are using the same tax software they used last year usually will not need to enter prior-year information to electronically sign their 2017 tax return.
  • Filing with an expired ITIN. The IRS will process and treat as timely a return filed with an expired Individual Tax Identification Number, but won’t allow any exemptions or credits. Taxpayers will receive a notice explaining that an ITIN must be current before the IRS will pay a refund. Once the taxpayer renews the ITIN, the IRS will process exemptions and credits and pay an allowed refund. ITIN expiration and renewal information is available on IRS.gov.

Sci-Fi & Information Law: Essay Competition

The University of Amsterdam’s Institute for Information Law recently announced its essay competition: “Science Fiction and Information Law.”

Authors in both ‘genres’ dedicate a considerable share of their time speculating about how [new] technologies may evolve. Most importantly, science fiction authors, as well as information law scholars, ponder what the implications will be for society, markets and the values that we cherish and seek to protect. . . .

We welcome essays that reflect on our possible data-driven future, where data has been firmly established as an economic asset and new, data-driven smart technologies can change the way we live, work, love, think and vote. How will AI change politics, democracy or the future of the media? What will life be like with robot judges and digital professors? What is the future of transportation in the wake of drones, the autonomous car and perfect matching of transportation needs? Is there a life beyond the ubiquity of social media: Is there bound to be an anti-thesis and if so, what will the synthesis look like? What will happen when social media corporations start fully-fledged co-operation with the police? Or unleash the power of public engagement to solve or prevent crime by themselves? How would crime respond to all this? What could be the true implications of the ‘data economy’ and if we really can pay our bills with our data? How will future information law look like in the age of AI?

The essays will be read and judged — the top five will receive awards, published in the Internet Policy Review, and the authors invited to Amsterdam for a public symposium.

Rules:

  • 8000-15000 words in English.
  • Authors might already be sci-fi authors but can come from any realm.
  • Essay emailed to Prof. Helberger n.helberger@uva.nl by December 15, 2018.

Taxpayers can sign up to receive IRS email subscription services

The IRS issues tax information by email for many different audiences. Here are some of the electronic subscriptions people can request by visiting the e-News Subscriptions page on IRS.gov:

  • Guidewire: People who sign up for Guidewire receive email notifications when the IRS issues advance copies of tax guidance, such as regulations, revenue rulings, revenue procedures, announcements, and notices.
  • e-News for Tax Professionals: Provides the latest national news for the tax professional community, as well as links to resources on IRS.gov and local news and events by state.
  • Outreach Corner:  Provides organizations such as businesses and non-profits articles content that they can use in their own communication products and newsletters.
  • Tax Statistics: Supplies information about the most recent tax statistics.
  • Quick Alerts: Provides tax professionals and tax software providers with the latest information about e-file issues and events.
  • IRS Newswire: Provides news releases issued by IRS National Media Relations Office in Washington, DC.

Here are some other electronic subscriptions the IRS offers:

Missed the tax deadline and owe tax? File by June 14 to avoid higher late-filing penalty

Taxpayers who owe tax and file their federal income tax return more than 60 days after the deadline will usually face a higher late-filing penalty. For that reason, the Internal Revenue Service urges affected taxpayers to avoid the penalty increase by filing their return by Thursday, June 14.

Ordinarily, the late-filing penalty, also known as the failure-to-file penalty, is assessed when a taxpayer fails to file a tax return or request an extension by the due date. This penalty, which only applies if there is unpaid tax, is usually 5 percent for each month or part of a month that a tax return is late.

If a tax return is filed more than 60 days after the April due date — or more than 60 days after the October due date if an extension was obtained — the minimum penalty is either $210 or 100 percent of the unpaid tax, whichever is less. This means that if the tax due is $210 or less, the penalty is equal to the tax amount due. If the tax due is more than $210, the penalty is at least $210.

The late-filing penalty does not apply to the more than 135 million taxpayers who met this year’s April 18 deadline to file their individual tax return. It also won’t apply to the estimated 14 million taxpayers who asked the IRS for a six-month extension of time to file, as long as they file by Oct. 15, 2018. Though a tax return claiming a refund is also not subject to penalty, the IRS reminds taxpayers that, by law, they only have three years to file for the refund.

For those who did not file or request an extension, the IRS recommends filing by June 14 to avoid a penalty increase. The late-filing penalty will stop accruing once the taxpayer files.

In addition, the IRS urges taxpayers to pay what they owe to avoid additional late-payment penalty and interest charges. The late-payment penalty, also known as the failure-to-pay penalty, is usually    ½ of 1 percent of the unpaid tax for each month or part of a month the payment is late. Interest, currently at the rate of 5 percent per year, compounded daily, also applies to any payment made after the original April 18 deadline.

After a return is filed, the IRS will figure the penalty and interest due and bill the taxpayer. Normally, the taxpayer will then have 21 days to pay any amount due.

Taxpayers can use their online account to view their amount owed, make payments and apply for an online payment agreement. Before accessing their online account, taxpayers must authenticate their identity through the Secure Access process.

Penalty relief may be available

Taxpayers who have a history of filing and paying on time often qualify to have the late filing and payment penalties abated. A taxpayer usually qualifies for this relief if they haven’t been assessed penalties for the past three years and meet other requirements. For more information, see the First-Time Penalty Abatementpage on IRS.gov.

Even if a taxpayer does not qualify for this special relief, they may still be able to have penalties reduced or eliminated if their failure to file or pay on time was due to reasonable cause and not willful neglect. Be sure to read the penalty notice carefully and follow its instructions for requesting this relief.

Payment options

Many taxpayers delay filing because they are unable to pay what they owe. Often, these taxpayers qualify for one of the payment options available from the IRS. These include:

  • Installment Agreement – An installment agreement, or payment plan, allows a taxpayer to pay over time. Individuals who owe $50,000 or less in combined tax, penalties and interest can request a payment plan using the IRS’s Online Payment Agreement application. Those who have a balance under $100,000 may also qualify for a short term agreement. The agreement can usually be set up in minutes and requesters receive immediate notification of approval. To reduce the chance of default and avoid having to write and mail a check each month, select the direct debit option for making these payments. For other ways to set up a payment plan, visit Payment Plans, Installment Agreements.
  • Offer in Compromise — Some struggling taxpayers may qualify to settle their tax bill for less than the amount they owe by submitting an offer in compromise. To help determine eligibility, use the Offer in Compromise Pre-Qualifier tool.

Special filing deadline rules apply to members of the military serving in combat zonestaxpayers living outside the U.S. and those living in declared disaster areas. For those who qualify, these special deadlines affect any penalty and interest calculations. Visit IRS.gov for details on these special filing rules.

Check withholding

Taxpayers who owe tax for 2017 can avoid having the same problem for 2018 by increasing the amount of tax withheld from their paychecks. For help determining the right amount to withhold, use the Withholding Calculator on IRS.gov

Tips for Taxpayers Who Have to Amend a Tax Return

Taxpayers who discover they made mistakes or omissions on their tax return can correct them by filing an amended tax return. Those who need to amend should remember these tips:

  • File using paper form. Use Form 1040X, Amended U.S. Individual Income Tax Return, to correct the tax return. Taxpayers can’t file amended returns electronically. They can obtain the form on IRS.gov/forms. Mail the Form 1040X to the address listed in the form’s instructions.
  • Amend to correct errors. File an amended tax return to correct errors or make changes to an original tax return; for example, taxpayers should amend to change their filing status or to correct their income, deductions or credits.
  • Don’t amend for math errors, missing forms. Taxpayers generally don’t need to file an amended return to correct math errors on their original return. The IRS will automatically correct these items. In addition, taxpayers don’t need to file an amended return if they forgot to attach tax forms, such as a Form W-2 or a schedule. The IRS will mail a request to the taxpayer, if needed.
  • File within three-year time limit. Taxpayers usually have three years from the date they filed the original tax return to file Form 1040X to claim a refund. Taxpayers can file it within two years from the date they paid the tax, if that date is later.
  • Use separate forms for each year. Taxpayers who are amending more than one tax return must file a Form 1040X for each tax year. They should mail each year’s Form 1040X in separate envelopes to avoid confusion. Taxpayers should check the box for the calendar year or enter the other calendar year or fiscal year they are amending. The form’s instructions have the mailing address for the amended return.
  • Attach other forms with changes. Taxpayers who use other IRS forms or schedules to make changes must attach them to the Form 1040X.
  • Wait to file for corrected refund for tax year 2017. Taxpayers who are due refunds from their original tax year 2017 return should wait to get it before filing Form 1040X to claim an additional refund. Amended returns may take up to 16 weeks to process.
  • Pay additional tax. Taxpayers who will owe more tax should file Form 1040X and pay the tax as soon as possible to avoid penalties and interest. They should consider using IRS Direct Pay to pay any tax directly from a checking or savings account at no cost.
  • Track amended return. Generally, taxpayers can track the status of their amended tax return three weeks after they file, using ‘Where’s My Amended Return?’ It’s available in English, Spanish, Chinese, Korean, Vietnamese and Russian. The tool can track the status of an amended return for the current year and up to three previous years. Taxpayers who have filed amended returns for multiple years can check each year, one at a time.

IRS highlights key business tax topics for continued education on small businesses

In recognition of National Small Business Week, April 29 to May 5, which was a HUGE success, the Internal Revenue Service wants to remind everyone of several resources to help small business owners and self-employed individuals understand and meet their tax obligations. The new tax law changes enacted in December 2017 make it especially important for these groups to know about new provisions affecting them.

These resources includ:

  • A series of news releases on various topics including the sharing economy, home office deduction, cybersecurity and the Work Opportunity Tax Credit.
  • Tax tips about business provisions under the new tax reform law. Topics include tax law changes to depreciation rules and the employer credit for family and medical leave and how it benefits employers. Tax tips are written in plain language and can be subscribed to using the IRS’s Tax Tips email-subscription program.
  • Information for small businesses is also available through IRS social media channels including tax tips and other resources. Stay informed following the hashtag #IRSsmallbiz and help us spread these messages by sharing the @IRSnews, @IRSTaxPros and @IRSenEspanol tweets.

Other small business resources

The IRS encourages business owners to check out other webinars on the IRS video portal. The portal has presentations on a variety of small business topics. Business owners may also be interested in these sites:

More information

Major tax reform was approved by Congress in the Tax Cuts and Jobs Act (TCJA) on December 22, 2017. The IRS has been working to implement its provisions and give information and guidance to taxpayers, businesses and the tax community as it becomes available.