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How Long Is a Tax Extension?

Monday, May 13th, 2013

A tax extension grants you an extra six months to file, but doesn’t give you any extra time to pay

A tax extension gives you an extra six months to file your return.

You must file an extension by April 15th (or whatever the normal tax deadline is for that year). It then grants you an extra six months to file, making your new deadline October 15th.

This year for 2012 taxes, for example, if you requested an extension by April 15, 2013, your return is due by October 15, 2013.

Note an extension only give you an extra six months to file, it does not give you an extra six months to pay. When you request an extension, you will have to estimate your tax liability and pay any tax due or else you could be subject to failure-to-pay penalties starting April 15th. (more…)

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Category: Tax Deadlines
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2010 Income Tax Refunds Only Available Until April 15, 2014

Friday, May 3rd, 2013

If you haven’t filed your 2010 return yet you have less than a year to get your refund

Most taxpayers are frightened of the IRS, and understandably so. Not only does the agency force us to go through the tortuous process of filing taxes every year, but it also has the power to implement some pretty drastic punishments when taxes go unpaid. It can levy your wages and bank accounts and force you to sell or mortgage assets to pay your tax debt.

But what most people don’t know is that the IRS is surprisingly lenient when it comes to minor offenses, such as filing a late return. Most late filers assume that they will get hit with massive penalties, so they try to hide from the IRS and avoid filing their taxes for even longer.

Doing so, however, might actually cause them to sacrifice a refund. Late filers are more likely than normal filers to receive a refund, and the tax code’s statute of limitations allows you to claim a refund for three years after the original due date of the return.

That means that the last chance to claim a refund from your 2010 return is April 15, 2014. That’s less than a year away! Take note: after next April 15th your refund belongs to the U.S. Treasury and you absolutely will not be able to claim it. (more…)

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Category: Tax Deadlines, Tax Tips
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Can I Get a Refund from 2009 Taxes?

Wednesday, March 27th, 2013

You can still get a refund from 2009, but only if you file your return before April 15, 2013

$917 million. That’s how much money in 2009 refunds is just sitting in the Treasury waiting to be claimed.

The IRS recently announced that there are an estimated 984,000 people who haven’t claimed their 2009 refunds. That’s an average refund of $932 per person! If that’s your money don’t let it go to waste.

You can still get your 2009 refund, but not for much longer. You must file your 2009 return by April 15, 2013 in order to receive it.

According to the statute of limitations, you have three years after a return’s original due date to file and still get a refund. After three years you can still file, but you won’t see any money. Your refund now belongs to the Treasury. (more…)

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Category: Tax Deadlines, Tax News
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What Is the Last Day to File Taxes 2013?

Thursday, March 21st, 2013

By April 15, 2013 you must file your return or request an extension, which pushes the deadline back to October 15th

The normal tax filing deadline is Monday, April 15, 2013. By this date, you must either file your return or request an extension.

Just to get specific about it, filing a return involves submitting to the IRS either Form 1040, 1040A, or 1040EZ and all the attendant forms and schedules that your return requires. You can either e-file your return or mail in a paper return. Note that if you are filing a paper return, your return must be postmarked by April 15th in order for it to be considered on time.

Filing an extension involves filing Form 4868 [Application for Automatic Extension of Time to File U.S. Individual Income Tax Return], which will give you an extra six months to file. This means that your new deadline becomes October 15, 2013.

Note that this only gives you an extension of time to file, not an extension of time to pay. When you file Form 4868, you have to estimate and pay your tax liability. (more…)

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Category: Tax Deadlines, Tax Tips
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Capital Gains Tax 2013

Wednesday, March 13th, 2013

Major changes to federal capital gains tax mean high earners will pay more in 2013

The fiscal cliff deal, officially known as the American Taxpayer Relief Act of 2012 (despite the fact that it was passed in the early hours of 2013) made several radical changes to the tax code that go into effect for the 2013 tax year. One of the most important is the increase in capital gains taxes.

For those new to issues of taxation, the IRS defines a capital gain this way:

Almost everything you own and use for personal or investment purposes is a capital asset. Examples include a home, personal use items like household furnishings, and stocks or bonds held as investments. When a capital asset is sold, the difference between the basis in the asset and the amount it is sold for is a capital gain or capital loss.

There are two different types of capital gains: short-term capital gains and long-term capital gains. A short-term capital gain results from selling an asset held for one year or less. A long-term capital gain results from selling an asset held for longer than one year. This distinction is important because short-term and long-term capital gains are taxed differently. (more…)

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Why Instant Rapid Refund Anticipation Tax Loans Are a Bad Idea

Friday, March 8th, 2013

RALs have been stopped by regulation, but their replacements are just as bad an idea

During the 2009 tax filing season 7.2 million taxpayers received a Refund Anticipation Loan (RAL) which essentially gave them an advance on their tax refund.

Since then, however, federal government regulations have cracked down on RALs so that they are no longer readily available – and with good reason. RALs were taking advantage of ordinary taxpayers with their high fees and interest rates.

Despite the regulation there are a new range of similar products that take advantage of taxpayers just as much. A report by the National Consumer Law Center (NCLC) and Consumer Federation of America warns against

products such as loans offered by Liberty Tax Service, with loans in at least one of the 26 states where they are carried reportedly carrying a $49.90 fee plus an undisclosed amount of interest. An interest rate of 36 percent would cost a borrower about $80 for a 15-day loan of $2,000. Jackson Hewitt, meanwhile, offers tax-time credit ranging from $200 to $1000 at a 35 percent interest rate, a $6.25 monthly fee, and a fee 3 percent or $10 every time the credit line is tapped. (more…)

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File a Tax Extension Online with Form 4868

Thursday, March 7th, 2013

Filing a tax extension gives you an extra six months to file your return, but not to pay your tax bill

The April 15th tax deadline is still over a month away, but for many taxpayers this won’t be long enough to get their financial ducks in a row. Thankfully, the IRS allows you to file an extension and buy yourself a little extra time.

An extension gives you an extra six months to file. Instead of being due on April 15, 2013 your tax return will then be due on October 15, 2013. E-file stays open until the October deadline so you can prepare and file your return just as you would during the season.

In order to request a tax extension you must file Form 4868 [Application for Automatic Extension of Time to File U.S. Individual Income Tax Return] by the normal tax deadline, April 15th.

An extension does not, however, give you an extra six months to pay the tax man. On Form 4868 you must estimate your tax liability and pay any balance due. If this amount is different from what you get after actually filing your taxes later in the year, you will either receive the difference in the form of a refund or have to send an extra check to the IRS. (more…)

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IRS Refund Problems Cause Delays

Tuesday, February 26th, 2013

Many taxpayers are frustrated by IRS delays and a lack of information from Where’s My Refund

Going into this tax season we knew that refunds were going to be delayed. Right off the bat the IRS increased the time frame within which most people can expect their refund. Instead of the old 8-15 days it suddenly became “under 21 days.”

Then the fiscal cliff nuttiness in Congress pushed the start of the season back two weeks to January 30th. These two changes alone meant that lots of people would be getting their money 2-3 weeks later than usual.

But as the tax season has progressed, the IRS has run into even more problems. Before the start of the season this year the IRS made some changes to its system to try to cut down on instances of tax fraud and identity theft, which affected over a million taxpayers last year. This is a huge relief to anyone who’s had their Social Security number or refund stolen.

Once the season started, however, the IRS discovered some problems with this new system that required a little fine-tuning. These adjustments caused many returns to be delayed for an additional week. (more…)

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2013 Income Tax Rates

Tuesday, February 19th, 2013

Congress has made some important changes to individual income tax rates for 2013

Thanks to the federal government’s incompetence, most recently on display during the eleventh hour fiscal cliff negotiations at the beginning of the year, the federal individual income tax rates for the new year were up in the air for a lot longer than usual.

Never fear – your financial planning nightmare is over (at least until Congress decides to take another crack at governing, that is). The personal income tax rates have finally been set for 2013.

Remember, these are the tax rates for 2013 taxes, which must be filed between January and April 2014. They do not apply to 2012 taxes that we are currently in the process of filing.

2013 Income Tax Rate Table

The tax rates for the bottom six brackets remain unchanged from 2012. The biggest change is the addition is a new rate of 39.6% for individuals with incomes above $400,000 and married couples filing jointly with incomes above $450,000. (more…)

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Category: Tax News, Tax Tips, Uncategorized
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Can I File My 2009 Taxes in 2013?

Thursday, January 24th, 2013

File your 2009 taxes by April 15, 2013 to get your refund

Yes, you can still file your 2009 taxes. And what’s more, you can still get a refund – but not for much longer. The IRS has a statute of limitations that only allows you to get a refund for three years after the original due date of a return.

This means that for 2009 taxes (originally due on April 15, 2010) the last day you can get a refund is April 15, 2013. After this date the government gets to keep your refund money, even though you’re technically still required to file a 2009 return.

If you haven’t filed your 2009 return yet, do so now. Don’t give away money that rightfully belongs to you.

Many people who are late on their taxes automatically assume that they’ll be punished for it. That’s not always the case. In fact, late filers are more likely to receive a refund than people who file during the regular tax season. And if you are due a refund you don’t have to pay any penalties or interest. (more…)

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Category: Tax Deadlines, Tax News, Tax Tips
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