Taxes filed, time to chill? Not so fast, says IRS
Article Published by: richmond.com
The April 18 federal tax-filing deadline has come and gone. Your taxes are paid, and maybe you have your refund in hand.
Nothing to do now but sit back and chill for eight months or so, right? The Internal Revenue Service respectfully disagrees.
Given recent changes in tax tables created by the Tax Cuts and Jobs Act of 2017, IRS officials are urging taxpayers to do a “paycheck checkup” and other double-checks, the better to avoid a possibly unpleasant surprise in early spring next year.
“The IRS is taking special steps to help taxpayers understand these tax law changes,” said Acting IRS Commissioner David Kautter. “We encourage people to do a paycheck checkup to help make sure they’re having the right amount of tax withheld for their unique personal situation. To help with this, the IRS has added and updated a variety of tools and information to help taxpayers.”
The IRS says taxpayers should start by determining how much money they want employers to withhold from their paychecks.
That can be done on the “Withholding Calculator” link on www.irs.gov. Having too little tax withheld can mean a surprisingly high tax bill next year. And with the average refund topping $2,800, the IRS said some taxpayers might prefer to have less tax withheld up front and receive more in their paychecks.
Taxpayers can use the calculator to estimate their 2018 income tax. It compares that estimate to the taxpayer’s current tax withholding options.
Some may wish to change their withholding with their employer. The IRS notes that it’s helpful to have a completed 2017 tax return with you when you visit the website.
Taxpayers who need to adjust their withholding will need to submit a new Form W-4, also known as an Employee’s Withholding Allowance Certificate, to their employer.
The IRS said the paycheck checkup is highly recommended for two-income families, people working two or more jobs, parents who claim credits such as the Child Tax Credit, people who itemized deductions in 2017 and those who received either large tax refunds or large tax bills in 2017.
The IRS also has launched a series of “tax reform tax tips” at www.irs.gov/newsroom/tax-reform. The periodic notices offer tax changes and other information in plain language.
For some, tax season goes on even now. That includes citizens who filed for an extension, others who did not file or pay what is owed, or those awaiting refunds. The IRS said it has help available for them, too.
There’s no penalty for filing a late return after the tax deadline if a refund is due. Penalties and interest only accrue on unfiled returns if taxes were not paid by April 18. IRS “Free File” is available through Oct. 15 for incomes less than $66,000. To get more information to file electronically, visit www.irs.gov/filing/free-file-do-your-federal-taxes-for-free.
If a federal return is filed more than 60 days after the April due date, the minimum penalty is either $210 or 100 percent of the unpaid tax, whichever is less. This means that if the tax due is $210 or less, the penalty is equal to the tax amount due. If the tax due is more than $210, the penalty is at least $210.
In some cases, taxpayers filing after the deadline may qualify for penalty relief. If there is a good reason for filing late, the IRS said taxpayers should attach an explanation to their returns. Taxpayers who have a history of filing and paying on time often qualify for penalty relief.
The agency said a taxpayer will usually qualify for such relief if they haven’t been assessed penalties for the past three years and meet other requirements. For details, do a “first-time penalty abatement” search on www.irs.gov.
Still looking for your refund? Go to www.irs.gov/refunds, where multiple options are explained to check on your status.
Those who owe taxes can get information on payments or applying online for a payment plan at www.irs.gov/payments/view-your-tax-account.
The IRS said it routinely corrects math errors on returns and subsequently notifies taxpayers by mail. But if a taxpayer discovers a major error or omission, the agency suggests consulting this site to determine if an amended return is necessary: www.irs.gov/help/ita/should-i-file-an-amended-return.
Finally, the IRS stressed that it never makes initial, unsolicited contact via email, text or social media on filing, payment or refund issues. The agency initiates most contacts through regular mail. Forward suspicious emails to phishing@irs.gov.
ABOUT MICHAEL SMERIGLIO:
Michael Smeriglio III is a financial specialist. A licensed CPA since 1985, Mike has been providing tax preparation services to individuals and businesses for more than 30 years through his firm located in Greenwich, CT.