Penalties Feed

One of the big sticks that the Internal Revenue Service wields is penalties for our mistakes or willful disregard of tax laws. Some of the penalties were increased in 2016 thanks to law changes. Others are hiked each year if inflation so warrants. Here's a roundup of some major tax penalties changes ahead in 2017. Don't file, pay more: The biggie for individual taxpayers is the charge for late filing. In 2016, if you filed a return more than 60 days after the due date or any extension to file that you got, then you faced a penalty of the... Read more →


Time is rapidly running out to make year-end tax moves, but if you're a septuagenarian, here's one that you definitely cannot afford to overlook. If you're 70½ or older, congrats and happy, happy on all those full and half birthdays! Remember, though, that now you must take out at least an IRS-specified amount from your tax-deferred retirement account(s) by the end of the year. Miss the deadline and you'll owe a major tax penalty. (Birthday party photo courtesy Today's Senior Network) Half birthday tax trigger: If you're 70½ and have a traditional IRA (or more than one of these accounts)... Read more →


A workplace retirement plan, where, in most cases, employees automatically put in some pre-tax money each pay period, is the largest -- or only -- savings many folks have. Louisiana flood victims can now access their retirement money more easily to help with their recovery efforts in flooded areas, like Port Vincent shown in this National Oceanic and Atmospheric Administration (NOAA) photo. Click the image to see more NOAA aerial before-and-after shots of Louisiana flood areas. And as the name indicates, retirement plans are for your post-work years. Sometimes, though, you need that money before you leave the workforce. In... Read more →


A married couple who helped the federal government collect more than $74 million from a tax criminal finally got their financial reward last week. U.S. Tax Court building in downtown Washington, D.C. On Aug. 3, after fighting for the whistleblowing payment for four years, the anonymous tax tattletales, referred to as Petitioner 21276-13W and Petitioner 21277-13W in court documents, were awarded $17,791,607. The U.S. Tax Court ruled the husband and wife deserved the nearly $17.8 million whistleblower award, which is this week's By the Numbers figure, despite the federal government's argument that the claim was outside the scope of the... Read more →


Even with three extra days to complete taxes this year, some folks missed the April 18 (or 19) tax filing deadline. Did you just give up on tax filing this year? You need to get a return to the IRS ASAP or you'll pay the price. Maybe a personal emergency took precedence. Perhaps you meant to get the job done, but it took longer than you planned and exasperated, you just said, "Later!" Or you discovered you owe, but don't have the money and thought, "What's the point?" The point, regardless of why you didn't get your Form 1040 (or... Read more →


While millions of Americans on Monday, April 18, were worrying about getting their taxes to Uncle Sam on time, folks in Houston had bigger problems. Tax Day 2016 coincided with deadly flooding in Texas' largest city. Rescuers head out in boats, rafts to help motorists stranded on flooded Houston streets. Click image to watch CBSN video. The Internal Revenue Service on April 18 announced that taxpayers affected by the severe weather in the Houston area, as well as in other hard-hit parts of Texas, may qualify for relief from the usual late-filing penalties. Penalty relief for flooded late filers: If... Read more →


Paying taxes isn't voluntary. That's why there's payroll withholding to take the money out of our wages before we get our checks. Don't pay your taxes or file late and you'll be hit with a tax penalty. But the Internal Revenue Service does rely on taxpayers to voluntarily file a return every year and if enough tax hasn't been withheld, pay any added amount that's due. The process is a bit different for self-employed folks. Here the IRS expects estimated tax payments (generally four a year via Form 1040-ES) in addition to an annual Form 1040. Good tax citizenship, however,... Read more →


I know all y'all are fixated on tonight's $1.5 billion Powerball drawing and that lottery jackpot's tax implications. But many of you -- including me! -- also must remember to meet the deadline for our final 2015 estimated tax payment. That's coming up on Friday, Jan. 15. Today's Daily Tax Tip has the skinny on paying estimated taxes. You also can read more about calculating these four extra tax payments here. Paying on untaxed income: Estimated tax payments are required when you get income, both earned (for example, self-employment as your main source of income or from side jobs to... Read more →


Congress is still working on a compromise to put the 50+ expired tax extenders back into the tax code, some permanently. The plan is to attach the extenders to the fiscal year 2016 omnibus federal spending bill that must be OK'ed by Dec. 16. Then Representatives and Senators can head out of Washington, D.C., for holiday celebrations back home. Before that happens, though, another bill that also has tax ramifications is likely to clear Congress. The House on Friday afternoon (Dec. 11) handily passed H.R. 644, the Trade Facilitation and Trade Enforcement Act of 2015. Also referred to as the... Read more →


"You don't need a fancy legal degree to understand that Congress intended for every eligible American to have access to tax credits that would lower their health care costs regardless of whether it was state officials or federal officials who are running the marketplace. I think that it's a pretty clear intent of the law." ~ Josh Earnest, White House press secretary Some federal judges would -- and did -- disagree with the White House spokesman's assessment today of the health care subsidy issue. They issued rulings this morning (Tuesday, July 22) on the matter. One court said the federal... Read more →


The U.S. tax system is based on the pay-as-you-earn concept. Every worker who gets a paycheck knows this by the amount of income and payroll taxes withheld each payday. If you get money from other sources where withholding isn't in effect, Uncle Sam expects you to take care of your due taxes in a timely fashion, too. The mechanism for this is estimated tax payments. Estimated taxes are paid via four extra payments filed with the Internal Revenue Service using Form 1040-ES. Click image to access the PDF version of Form 1040-ES, including all vouchers and instructions. They are due... Read more →


With each passing minute, we get closer to the first government shutdown in 17 years. That raises the question of what's next in the tax world if that happens. The Internal Revenue Services has a plan. Its 61-page shutdown contingency document details the agency's preparation for and implementation of a shutdown of its services and offices, as well as reactivation of tax functions. The key thing for the millions who got an extension until Oct. 15 to file their 2012 tax returns to note is that the IRS expects you to meet that deadline. Even if most of the federal... Read more →


A quick reminder for Boston area taxpayers and others affected by the April 15 Boston Marathon explosions: Your 2012 tax returns and payment of any tax are due Monday, July 15. Following the terrorist bombs set off on tax day, the Internal Revenue Service gave affected taxpayers three additional months to take care of tax tasks. Much of downtown Boston was still closed to the public on April 21 when Liz West took this photo, available via Flickr, of the area around where the two bombs exploded as the April 15 Boston Marathon was wrapping up. The extended deadline applies... Read more →


June 15 is a big tax day. It's normally the due date for the year's second estimated tax payment. It's also the filing deadline for taxpayers abroad, be they private citizens or members of the U.S. military. But when June 15 falls on a weekend, like today, then the deadline is pushed to the next business day. That means these tax tasks must be taken care of no later than Monday, June 17. I blogged last week about estimated taxes, so today's post focuses on the tax responsibilities of taxpayers living outside U.S. borders. Two more months to file: The... Read more →


The tornado that plowed through Moore, Okla., Monday afternoon now rivals the one that hit in the same area on May 3, 1999. The National Weather Service, after its personnel surveyed the damage, has classified the May 20, 2013, twister as a category 5 on the Enhanced Fujita scale. Click for larger view of the two EF5 tornadoes that hit Moore, Okla., 14 years apart. Image courtesy Norman, Okla., National Weather Service office. You also can see the paths of the 1999, 2013 and May 8, 2003, twisters that all touched down in the same area at KFOR-TV NewsChannel 4's... Read more →


Late this afternoon the Internal Revenue Service announced that Boston-area taxpayers will get three more months to both file and pay any federal tax due. Here's the full statement: IRS Announces Three-Month Filing, Payment Extension Following Boston Marathon Explosions IR-2013-43, April 16, 2013 WASHINGTON — The Internal Revenue Service today announced a three-month tax filing and payment extension to Boston area taxpayers and others affected by Monday’s explosions. This relief applies to all individual taxpayers who live in Suffolk County, Mass., including the city of Boston. It also includes victims, their families, first responders, others impacted by this tragedy who... Read more →


April 15 was the tax filing deadline for most federal and state taxpayers. Note the word "most." On the federal level, U.S. citizens living abroad or who are in the military and stationed outside the country get an automatic two-month extension to file their federal returns and pay any amount due without requesting an extension. The Internal Revenue Service considers these folks' 1040s as timely filed if they are sent by June 15. And while most of the states and Washington, D.C., that collect income tax returns from their residents do follow the federal April 15 due date, five set... Read more →


It's been, and still is, a screwy tax filing season for everyone -- taxpayers, the Internal Revenue Service, tax preparers. The main problem is that -- and I apologize for repeating this yet again, but… -- Congress didn't do its job properly. By putting off critical 2012 tax legislation all of last year and then finally rolling it into the fiscal cliff bill, formally known as the American Taxpayer Relief Act (ATRA), in early January, Representatives and Senators placed huge roadblocks in this year's filing season and system. (Be sure to let your members of Congress know what you think... Read more →


You've probably seen the commercial where the tax preparer mentions a client who hadn't filed returns for eight years. It happens. There are lots of excuses reasons for not filing taxes. There also is a big reason for taking care of your delinquent tax duties: Penalties. That was a recurring theme when I asked tax professionals via Facebook and Twitter what advice they give folks who've neglected to file returns. "I make sure they understand the potential seriousness, i.e., criminal penalties, and emphasize the need to deal with it ASAP since it only gets worse," says Diane L. Gilabert, aka... Read more →


Did you get so caught up in the fiscal cliff fight and the subsequent tax rate changes for 2013 that you almost forgot that our first tax deadline of the new year is almost here? Me, too. But tax time marched on and tomorrow, Jan. 15, is the due date for the final estimated tax payment of 2012. Dealing with estimated taxes also is today's Daily Tax Tip. The good news is that when it comes to 1040-ES forms and payments, either by check or money order payable to the U.S. Treasury, the Internal Revenue Service uses the same "timely... Read more →