Paying taxes Feed

If you're just now getting to work on your extended 2022 tax return, which is due to the Internal Revenue Service by Monday, Oct. 16, don't panic. These tips will help you make the most of the little tax time left. (Image courtesy Taxpayer Advocate Service, which also has some tips for Oct. 16 filers.) It's almost Tax Day for extreme procrastinators. The extension you got for your 2022 return ends on Monday, Oct. 16. Since the tax clock is ticking, let's get right to these eight tips that can help you complete your Form 1040 by the fast approaching,... Read more →

Update, Friday, Oct. 13, 2023: Former IRS contractor Charles Littlejohn pleaded guilty on Oct. 12 in federal court to disclosing tax return information without authorization. As noted in the post below, the compromised tax data was that filed by former president Donald J. Trump, and billionaires Jeff Bezos, Elon Musk, and Warren Buffett, among others. The tax material was given to two separate media organizations, which published stories based on the information. Littlejohn's sentencing hearing is scheduled for Jan. 29, 2024. He faces a maximum penalty of five years in prison. The eighth article of the Internal Revenue Service’s Taxpayer... Read more →

The third estimated tax payment deadline is tomorrow, Sept. 15. But this year, some usual 1040-ES filers in 10 states get more time. Don't be jealous. Their apparent tax good fortune is due to unfortunate circumstances. These individuals and business owners live in parts of Alabama, Alaska, California, Florida, Georgia, Hawai'i, Illinois, Mississippi, South Carolina, and Vermont that have been declared major disaster areas. Because Mother Nature can be fickle, some states endured her wrath multiple times, meaning different disaster areas with different deadlines. I've listed the affected areas below where taxpayers have more time to make their third estimated... Read more →

A photo of Chocolate Lab's chocolate lasagna, posted on Yelp in March by a diner. The Denver, Colorado, eatery now is closed, apparently due to delinquent taxes. Even before The Bear started streaming, it was no secret that running a restaurant is difficult. In addition to culinary responsibilities, restauranteurs must tend to zoning issues, health department inspections, and labor concerns. And, of course, there are tax matters. It's that last one that apparently has led to the closure of Denver's only chocolate-centric restaurant. I know, you wish you had made it to the Mile High City to try out Chocolate... Read more →

Most homes have welcome mats, but the friendly message usually doesn't apply to IRS personnel making home visits. (Photo by Andrew Neel on Unsplash) Nobody likes it when an Internal Revenue Service revenue officer shows up at a person's home. Not even the IRS officer. That's one reason why IRS Commissioner Danny Werfel today announced that the agency will stop, except in a few unique circumstances, making unannounced visits to taxpayers' homes. The move, effective immediately, ends a decades-long practice by IRS revenue officers. Before today's change, part of a revenue officer's job included visiting households to help taxpayers resolve... Read more →

June 15 was the deadline for certain taxpayers to make their second estimated tax payment for the current year. That could change, though, if a recently introduced bill makes it into law. Trueing up tax and real-life calendars: Even though they are called quarterly, the four estimated tax amounts follow a different IRS calendar instead of the one we have on our electronic devices or hanging on our walls. The tax agency wants the quarterly estimated payments on the 15thh of April, June, September, and the following January. The Tax Deadline Simplification Act move two of those estimated tax deadlines.... Read more →

Photo by Ays Be on Unsplash Congratulations to the Denver Nuggets on winning their first National Basketball Association championship. Congratulations, too, to all the bettors (like Drake) who pocketed some cash when their sports wagers paid off. Now all that's left is declaring those winnings as income on 2023 tax returns next year and paying the tax due on the money. Since sports betting has expanded across much of the United States, the Internal Revenue Service is in a much better position to know about these winnings and collect the associated taxes. U.S. commercial gaming revenue reached a quarterly record... Read more →

As someone who wants to be helpful — OK, I'm a moderately naggy wife — I appreciate that tendency, for the most part, in others. Even Uncle Sam. That's why I actually was glad to see the reminder, shown at the top of this post, pop up in my email, encouraging me to make sure my second estimated tax payment on June 15 won't bounce. Since other once-a-year expenses, like auto and home insurance premiums, are due this month, too, my checking account is a bit stretched. And it is possible the payment could slip my mind. I scheduled it... Read more →

Photo by Leeloo Thefirst Tax Day 2023 came and went and you weren't part of the annual tax-filing party. That means the Internal Revenue Service has been toting up penalty and interest charges you now owe on your unpaid tax. But you can stop that running number and avoid even larger noncompliance penalties if you do the job by June 14. Normal tax penalties: Under normal non-filing and non-payment calculations, the IRS assess two penalties. They can add up quickly. The late-filing penalty is 5 percent of the unpaid tax for each month or part of a month that an... Read more →

Automation often makes life easier, until it doesn't. Some very surprised California taxpayers learned that lesson this week. So did the Internal Revenue Service. The IRS' automated notice issuance system sent most California taxpayers letters saying that they had missed their filing deadline and owed the U.S. Treasury. The IRS was wrong. The agency's mistake understandably freaked out Golden State residents whom the IRS previously granted a new Oct. 16 due date. The extra time was allotted so the taxpayers could deal with problems caused by widespread natural disaster across the state earlier this year. The IRS issued a mea... Read more →

Two enterprising women packing up items they sold for shipping. (Photo by Kampus Production) A major contributor to the Tax Gap is unreported taxable income. The Internal Revenue Service thought it was going to be able to collect more when Congress new reporting rules were included in American Rescue Plan Act (ARPA) of 2021. ARPA dramatically reduced the income level at which third-party, e-commerce payment platforms — such as eBay, PayPal, Etsy, CashApp, and Venmo, — must issue 1099-K forms to sellers who got money through them. It was set to drop from $20,000 to $600 beginning in 2023. That... Read more →

Long-time ol' blog readers know I regularly nag remind them to make sure their payroll withholding is correct. The tax goal is to have the amount of income taxes taken out each pay period to be as close as possible to what you owe when you file your return. Adjusting that amount can get you to that target. That's accomplished by completing a new Form W-4 with your new withholding details, as discussed in my post earlier this year on how to get your tax withholding just right. OK, maybe I am a bit of a tax nag. Withholding changes... Read more →

In February 2022, the Internal Revenue Service announced that it was suspending several automatic tax notices. The move was prompted in large part by the massive backlog of tax filings that piled up when the agency closed offices as a precaution early in the COVID-19 pandemic. Now, taxpayers can expect those mailings to resume, starting with 2022 balance due notices. Current CP14s going out first: IRS Deputy Commissioner for Collection and Operations Support Darren Guillot, who was part of an American Bar Association tax conference panel in Washington, D.C., last week, said that approximately 5-to-8 million CP14 Notices, should start... Read more →

Photo by Markus Winkler Tax Day came and went, and you weren't part of the annual Internal Revenue Service's every earner is invited party. It happens. 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 Form 4868 to get a six-month extension) to the IRS on time, is that your continued procrastination could cost you.... Read more →

It's Tax Day 2023, meaning there literally are just hours left to finish your Form 1040 and get it to, or at least on its way, to the Internal Revenue Service. If you're still working on your tax return, here are five final tips for all y'all ultimate tax procrastinators. 1. File something. You need to send the IRS either your 2022 Form 1040 or Form 4868. You can submit either electronically, which the IRS recommends and is the option most taxpayers choose. That gives you until midnight in your time zone to punch send on your computer keyboard. But... Read more →

Tax filing time is ticking away. Make the most of these dwindling hours leading to the Tax Day deadline. (Photo by KoolShooters) If you've put off your tax filing until now, the day before your return is due, don't panic. You've still got time — but not much — to do the tax job right. These 10 last-minute filing tips can help you get the job done by tomorrow's April 18 deadline. 1. Determine whether you need to file. Most Americans who earn money, be it through full-time jobs or self-employment or investment income, do have to fill out a... Read more →

April's flowers are a delight, and you can enjoy them as soon as you finish up the month's tax tasks. (Photo by Eilis Garvey on Unsplash) Welcome to the first full week of April, the month that tends to bring out conflicted feelings in most of us. While most of us are delighted that we can put away our winter coats and enjoy the arrival of spring flowers, April's arrival also means that millions of us still must confront our annual tax filing tasks. If you've yet to file your 2022 return, here are six tax tasks to consider as... Read more →

Photo by Annie Spratt on Unsplash Unless we're getting a big refund, most of us put off dealing with our taxes. That's happening again this filing season. The Internal Revenue Service reports that through March 10, it had received 63.4 million returns. That's about the same number of returns it received at the same point last year. If 2023 filings continue to follow the 2022 pattern, then the IRS is still waiting for more than 100 million returns. Some people have good reasons for the delay. Their tax situations are complicated, taking time to sort through. Others are missing necessary... Read more →

… and some special instructions for those who owe $1 or less or $1 million or more. While bank checks may seem antiquated to most people today, some people still like to pay that way. That includes writing a check to cover their tax bill. (Photo by Steve Shook via Flickr CC) Since most of us e-file our taxes, it's only natural that when we owe, we pay Uncle Sam electronically, too. But most is not all. Some folks still file paper returns. And some taxpayers who do e-file still prefer to pay with an old fashioned, handwritten paper check... Read more →

Credit cards are a popular way to pay taxes, but there are several other ways to e-pay what you owe the IRS. (Photo by Mika Baumeister on Unsplash) Mark this day. Tax Day is more than a month away, but I finished up the ol' 1040 today. Really! As expected, and as usual, my tax calculations revealed that we owe Uncle Sam a couple hundred bucks. So I went to my Electronic Federal Tax Payment System (EFTPS) account and scheduled payment of our 2022 tax amount for April 18, as well as our 2023 estimated tax payments for that day... Read more →