If you're expecting a refund, you have three years from when you originally filed or two years from when you paid taxes for the year you were owed a refund. Avoid many common errors by filing electronically. Mistakes can result in penalties. The goal is to fight ID thieves who file fake returns to claim tax refunds. These options include filing an application for an automatic extension, using Free File software to e-file an extension, or paying all or part of your estimated tax due and indicating that the payment is for an extension. Those who expect refunds don't need to worry about paying taxes with your extension request, with the only outcome being that you'll wait longer before getting your money back.
The reason: The IRS has suffered huge staff reductions and has had to cut back on audits.
It is also alarming that one of the PCAs contracted by the IRS lost its contract with the U.S. Department of Education in 2015 for providing inaccurate information to student loan recipients.
One of the most surprising things about taxpayer behavior is that many people never take advantage of all the tax breaks that are available to them. McKenzie notes that the IRS has computers that spot red flags in any filing - whether in April or in an October extension. Taxes fund public education, public safety, economic growth and national defense. "The IRS may let you set up a direct debit agreement where your payment will be automatically debited monthly, so there's no need to keep in mind to write and send them a check each month". This is a great way to tackle those upgrades you've wanted to do in your home but didn't have the time or resources to do so. If you exceed this time threshold, you will not receive any refund. Also, check out these last-minute filing tips from the IRS.
The IRS may send a debt collector to retrieve the funds you owe, or if you owe $10,000 or more and can't pay it right away, the IRS may file a Notice of Federal Tax Lien.
But when it comes to IRS debt, the agency points out you can avoid the calls all together by logging on IRS.gov and simply paying your balance or setting up a payment plan. It likely will cost less than incurring late payment penalties. The total can be as much as 47.5 percent.More news: White House, lawmakers adrift over reviving health bill
The IRS has an online payment agreement tool and various ways to pay your income tax.
In some cases, the IRS will accept less than what you owe. And the loan interest you're trying to write off can not come from a personal loan. If you can pay everything within 120 days, don't file Form 9465, McKenzie said.
If you're self-employed, the dental, health and long-term insurance premiums that you paid for yourself, your spouse and your dependents may be tax-deductible. Consult with your retirement account's trustee or your financial adviser to learn the nitty-gritty details of how to manage this transaction so as to meet IRS requirements. "They wanted me to get in my vehicle, go get some money".
If you think agents won't touch your home, think again, said McKenzie. Should you want to get more of your money quicker this coming year you can do so by changing your W-4 form with your employer. "You can find a volunteer site".
If you've asked the IRS to split your refund but there's a delay processing your return, beware: The IRS will deposit your money only into the account you list first on Form 8888.