IRS extends filing deadline for taxes to April 18

Posts Tagged ‘Internal Revenue Service’

IRS extends filing deadline for taxes to April 18

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The Internal Revenue Service today opened the 2011 tax filing season by announcing that taxpayers have until April 18 to file their tax returns. The IRS reminded taxpayers impacted by recent tax law changes that using e-file is the best way to ensure accurate tax returns and get faster refunds.

Taxpayers will have until Monday, April 18 to file their 2010 tax returns and pay any tax due because Emancipation Day, a holiday observed in the District of Columbia, falls this year on Friday, April 15. By law, District of Columbia holidays impact tax deadlines in the same way that federal holidays do; therefore, all taxpayers will have three extra days to file this year. Taxpayers requesting an extension will have until Oct. 17 to file their 2010 tax returns.

The IRS expects to receive more than 140 million individual tax returns this year, with most of those being filed by the April 18 deadline.

The IRS also cautioned taxpayers with foreign accounts to properly report income from these accounts and file the appropriate forms on time to avoid stiff penalties.

“The IRS has made important strides at stopping tax avoidance using offshore accounts,” said IRS Commissioner Doug Shulman. “We continue to focus on offshore tax compliance and people with offshore accounts need to pay taxes on income from those accounts.”

The IRS also reminded tax professionals preparing returns for a fee that this is the first year that they must have a Preparer Tax Identification Number (PTIN). Tax return preparers should register immediately using the new PTIN sign-up system available through www.IRS.gov/taxpros.

Who Must Wait to File

For most taxpayers, the 2011 tax filing season starts on schedule. However, tax law changes enacted by Congress and signed by President Obama in December mean some people need to wait until mid- to late February to file their tax returns in order to give the IRS time to reprogram its processing systems.

Some taxpayers – including those who itemize deductions on Form 1040 Schedule A – will need to wait to file. This includes taxpayers impacted by any of three tax provisions that expired at the end of 2009 and were renewed by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act Of 2010 enacted Dec. 17. Those who need to wait to file include:

Taxpayers Claiming Itemized Deductions on Schedule A. Itemized deductions include mortgage interest, charitable deductions, medical and dental expenses as well as state and local taxes. In addition, itemized deductions include the state and local general sales tax deduction that was also extended and which primarily benefits people living in areas without state and local income taxes. Because of late Congressional action to enact tax law changes, anyone who itemizes and files a Schedule A will need to wait to file until mid- to late February.
Taxpayers Claiming the Higher Education Tuition and Fees Deduction. This deduction for parents and students – covering up to $4,000 of tuition and fees paid to a post-secondary institution – is claimed on Form 8917. However, the IRS emphasized that there will be no delays for millions of parents and students who claim other education credits, including the American Opportunity Tax Credit extended last month and the Lifetime Learning Credit.
Taxpayers Claiming the Educator Expense Deduction. This deduction is for kindergarten through grade 12 educators with out-of-pocket classroom expenses of up to $250. The educator expense deduction is claimed on Form 1040, Line 23 and Form 1040A, Line 16.

In addition to extending those tax deductions for 2010, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act also extended those deductions for 2011 and a number of other tax deductions and credits for 2011 and 2012 such as the American Opportunity Tax Credit and the modified Child Tax Credit, which help families pay for college and other child-related expenses. The Act also provides various job creation and investment incentives including 100 percent expensing and a two-percent payroll tax reduction for 2011. Those changes have no effect on the 2011 filing season.

The IRS will announce a specific date in the near future when it can start processing tax returns impacted by the recent tax law changes. In the interim, taxpayers affected by these tax law changes can start working on their tax returns, but they should not submit their returns until IRS systems are ready to process the new tax law changes. Additional information will be available at www.IRS.gov.

For taxpayers who must wait before filing, the delay affects both paper filers and electronic filers. The IRS urges taxpayers to use e-file instead of paper tax forms to minimize confusion over the recent tax law changes and ensure accurate tax returns.

Except for those facing a delay, the IRS will begin accepting e-file and Free File returns on Jan. 14. Additional details about e-file and Free File will be announced later this month. Read the rest of this article on IRS.gov

IRS Has $1.3 Billion in Unclaimed Tax Refunds for People Who Didn’t File Tax Returns

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Author: The Money Coach

If you haven’t filed a tax return in years, the Internal Revenue Service wants you – and not in the way that you think.

The IRS is actually looking to return $1.3 billion in unclaimed refunds to roughly 1.4 million people who never filed a federal income tax return for 2006. If you happen to be among those non-filers, you must act fast because to collect any money you are owed, a tax return for 2006 must be filed by April 15, 2010. Under the law, you only have 3 years to claim a tax refund; after three years, any money that would have been due to you becomes the property of the U.S. Treasury.

Lots of people don’t file tax returns for a host of reasons. Some people earned too little money, and weren’t required to file. They may nevertheless be entitled to a refund, based on taxes paid or tax credits for which they were eligible. At other times, however, people don’t file a return simply because they owe money – or they’re scared that they may owe money. Even if you owe the IRS, chances are you can work out a payment plan to clear up past-due payments. If you didn’t owe money, and didn’t file a 2006 tax return, you don’t have to worry about penalties because penalties are only imposed on individuals who had taxes due.

According to IRS statistics, the typical unclaimed refund for 2006 is $604.

The states with the highest numbers of non-filers who have a 2006 tax refund waiting for them are: California (159,800 individuals); Texas (109,600 individuals); Florida (101,700 individuals); and New York (76,700 individuals).

What’s more, many people who didn’t file their taxes a few years ago may stand to gain even bigger refunds if they made less than approximately $38,000 in 2006 and claim the Earned Income Tax Credit.

For more information about getting an unclaimed refund, check out more on this IRS video in English or Spanish.

How long do I need to keep my business tax records?

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Author: The Money Coach

Q: In the May 2008 Issue of Health Magazine, Your Article Said You Only Need to Keep Your Tax Records Three years After Filing a Tax Return. My Understanding Was That the IRS Could File Up to Six Years Later. I Have a Small Business and Have Been Keeping My Records Six Years. What is the Current Ruling for This?

A: Under section 6501(a) of the Internal Revenue Code, the IRS is required to assess tax within three years after a tax return is filed. Therefore, most people need only keep tax records for three years after filing a tax return, because that is the time period during which:
a) a taxpayer can amend a tax return to claim a credit or refund; or
b) the IRS can assess additional tax

As you are self-employed, however, there are a few circumstances in which you should keep records longer. Keep employment-related tax records for at least 4 years. Also, if you ever under-report income by 25% or more of the gross amount shown on your tax return, then you should keep records for at least six years after you file a return. In such as case, the IRS has six years to assess taxes – not just three. What’s more you should keep tax records indefinitely if you file a fraudulent return, or if you do not file a return at all. But I assume that these last two scenarios don’t apply to you.

According to the IRS, “the exact length of time you should keep a document depends on the action, expense or event the document records.”

The IRS further offers this guidance:

1.   You owe additional tax and situations (2), (3), and (4), below, do not apply to you; keep records for 3 years.
2.   You do not report income that you should report, and it is more than 25% of the gross income shown on your return; keep records for 6 years.
3.   You file a fraudulent return; keep records indefinitely.
4.   You do not file a return; keep records indefinitely.
5.   You file a claim for credit or refund* after you file your return; keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later.
6.   You file a claim for a loss from worthless securities or bad debt deduction; keep records for 7 years.
7.   Keep all employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.

Here’s the direct link to exact page on the IRS’s website that answers the question: How long should I keep records? http://www.irs.gov/businesses/small/article/0,,id=98513,00.html

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Posts Tagged ‘Internal Revenue Service’