IRS provides last-minute tips for last-minute filers

WASHINGTON — With the July 15 tax-filing deadline − postponed from April 15 – only a few days away, the IRS is reminding taxpayers who have yet to file their tax returns that IRS.gov has tools and services to help them meet their tax obligations.

IRS tax help is available 24 hours a day on IRS.gov. Whether filing a tax return, requesting an extension or making a payment, the IRS website can help last-minute filers on just about everything related to taxes. Taxpayers can also use the Interactive Tax Assistant tool to answer many tax questions they may encounter.

The IRS reminds taxpayers they have a range of expert help available through a qualified tax professional, including certified public accountants, enrolled agents and attorneys. The IRS encourages people who need the help of a tax professional to visit a special page on IRS.gov.

Prepare and file taxes for free

Taxpayers also have several options for preparing and filing their tax returns:

  • Taxpayers with income of $69,000 or less can use IRS Free File to find free tax preparation software.

  • Taxpayers with incomes above $66,000 and comfortable doing their own taxes can use Free File Fillable Forms for free.

  • Use commercial tax prep software to prepare and file taxes through IRS approved electronic channels.

  • Use an authorized e-File provider accepted by our electronic filing program. Authorized IRS e-file providers are qualified to prepare, transmit and electronically file returns.

  • Members of the military and qualified veterans can use MilTax, a free online tax service provided by the Department of Defense and Military OneSource.

Receive refunds faster

The fastest way to receive a refund is to file electronically and use direct deposit. Taxpayers who file electronically and request direct deposit for their refund need to know that:

  • Nine out of 10 tax refunds are issued in 21 days or less.

  • The best way to check on a refund is the “Where’s My Refund?” tool.

  • The “Where’s My Refund?” tool available on IRS.gov and the IRS2Go mobile app.

  • “Where’s My Refund?” is updated once a day, usually overnight.

  •  Refunds can be divided into up to three accounts.

Delays for paper tax returns

The IRS is experiencing delays in processing paper tax returns due to limited staffing. This is another reason that taxpayers should choose to electronically file their taxes.

Taxpayers who filed a paper tax return and expect a refund may experience a delay beyond the normal time frame of four to six weeks from the time they mailed the return. The IRS will process paper returns in the order they are received.

Taxpayers should not file the same return again or call the IRS if they filed a paper tax return and are experiencing a refund delay.

Get more time to file

Individual taxpayers who need additional time to file beyond the July 15 deadline can request a filing extension to Oct. 15 in one of two ways:

Special rules may apply for some military personnel if they are:

Pay with ease

Taxpayers can file now and schedule their federal tax payments up to the July 15 due date. They can pay online, by phone or with their mobile device using the IRS2Go app. When paying federal taxes electronically taxpayers should remember:

  • Electronic payment options are the optimal way to make a tax payment.

  • They can pay when they file electronically using tax software online. If using a tax preparer, taxpayers should ask the preparer to make the tax payment through an electronic funds withdrawal from a bank account.

  • IRS Direct Pay allows taxpayers to pay online directly from a checking or savings account for free, and to schedule payments up to 365 days in advance.

  • Taxpayers can choose to pay with a credit card, debit card or digital wallet option through a payment processor. The payment processor adds a fee; no fees go to the IRS.

  • The IRS2Go app provides the mobile-friendly payment options, including Direct Pay and through payment providers.

  • Taxpayers may also enroll in the Electronic Federal Tax Payment System and have a choice of paying online or by phone by using the EFTPS Voice Response System.

Get more time to pay

Qualified taxpayers can choose to pay any taxes owed over time through an installment agreement. An online payment plan can be set up in a matter of minutes. Interest and late-payment penalties continue to accrue on any unpaid taxes after July 15.

Payment options include:

However, a taxpayer’s specific tax situation will determine which payment options are available.

The IRS has more information for taxpayers who owe taxes, but cannot afford to pay the full amount.

Get the full picture

Taxpayers can go to IRS.gov/account to securely access information about their federal tax account. They can view the amount they owe, access their tax records online, review their payment history and view key tax return information for the most recent tax return as originally filed.

Source: IRS Newswire

Business owners can claim a qualified business income deduction

Eligible taxpayers may now deduct up to 20 percent of certain business income from domestic businesses operated as sole proprietorships or through partnerships, S corporations, trusts, and estates.  The deduction may also be claimed on certain dividends.  Eligible taxpayers can claim the deduction for the first time on the 2018 federal income tax return they file in 2019. This provision is the result of tax reform legislation passed in December 2017.

Here are some things business owners should know about this deduction:

  • The deduction applies to qualified:
    – Business income 
    – Real estate investment trust dividends
    – Publicly traded partnership income

  • Qualified business income is the net amount of qualified items of income, gain, deduction and loss connected to a qualified U.S. trade or business. Only items included in taxable income are counted.

  • The deduction is available to eligible taxpayers, whether they itemize their deductions on Schedule A or take the standard deduction.

  • The deduction is generally equal to the lesser of these two amounts: 
    – Twenty percent of qualified business income plus 20 percent of qualified real estate investment trust dividends and qualified publicly traded partnership income.
    – Twenty percent of taxable income computed before the qualified business income deduction minus net capital gains.

  • For taxpayers with taxable income computed before the qualified business income deduction that exceeds $315,000 for a married couple filing a joint return, or $157,500 for all other taxpayers, the deduction may be subject to additional limitations or exceptions. These are based on the type of trade or business, the taxpayer’s taxable income, the amount of W-2 wages paid by the qualified trade or business, and the unadjusted basis immediately after acquisition of qualified property held by the trade or business.

  • Income earned through a C corporation or by providing services as an employee is not eligible for the deduction.

  • Taxpayers may rely on the rules in the proposed regulations until final regulations appear in the Federal Register.

At Zhong & Sanchez, we provide high-quality tax and financial reporting services to privately-held entities and small business owners. Our expertise ranges from income tax filing and accounting services to international compliance and financial analysis. Located in the Silicon Valley, you can reach us at 510-458-4451 or schedule your first consultation today at https://calendly.com/zhongsanchez

More Information
REG-107892-18, Qualified Business Income Deduction 
Notice 2018-64, Methods for Calculating W-2 Wages for Purposes of Section 199A
FAQs

Source: IRS

IRS launches easy-to-use tax reform webpage

The IRS has launched an easy-to-use webpage, IRS.gov/taxreform, with information about how the Tax Cuts and Jobs Act affects your taxes, with a special section focused on tax exempt entities.

The tax reform page features three areas designed specifically for:

  • Individuals – For example, standard deduction increase, child tax credit, withholding. Use the Withholding Calculator to make sure you’re withholding enough tax from your paycheck.

  • Businesses – For example, depreciation, expenses and qualified business income deductions.

  • Tax Exempt Entities – For example, tax reform affecting retirement plans, tax-exempt organizations and governments.

Under the Tax Exempt Entities tab, you’ll find highlights of how tax reform affects retirement plans, tax-exempt organizations and tax-advantaged bonds.

 

Retirement plans

  • Rollovers of retirement plan loan offsets – If your plan offsets an outstanding loan balance when you leave employment, you have until the due date of your individual tax return, plus extensions, to rollover those amounts to another plan or IRA.

  • Roth recharacterizations – You can no longer recharacterize amounts rolled over to a Roth IRA from other retirement plans, such as 401(k) or 403(b) plans, or a conversion from a traditional IRA, SEP or SIMPLE to a Roth IRA.

Tax-exempt organizations

  • Tax reform imposes a 1.4 percent excise tax on the investment income of certain educational institutions.

  • An exempt organization with more than one unrelated trade or business must calculate unrelated business taxable income separately for each trade or business.

Tax-advantaged bonds

  • Tax reform repealed the authority to issue tax-credit bonds and direct-pay bonds.

  • The IRS will not process applications for, or issue allocations of, the remaining unused authority to issue new clean renewable energy bonds.

At Zhong & Sanchez, we provide high-quality tax and financial reporting services to privately-held entities and small business owners. Our expertise ranges from income tax filing and accounting services to international compliance and financial analysis. Located in the Silicon Valley, you can reach us at 510-458-4451 or schedule your first consultation today at https://calendly.com/zhongsanchez

Source: IRS