Sacramento CPA, Tax, Accounting, Bookkeeping
Tax Returns - After April 15th
Some tax returns were extended, refunds are late, errors were uncovered on filed tax returns, and audit letters are sent to taxpayers.
Extensions
All tax returns on extension are due no later than October 15th. If payment wasn’t made by April 15th, late payment penalties and interest will apply.
Refund Late
If your tax refund is late, the IRS will not assist you until ten weeks has passed. You can call 1-800-829-1954 for assistance or log on to the IRS website at www.irs.gov.
Amended Tax Returns
If you find an error on your tax return or failed to include an item, you can file an amended tax return up to three years from the filing deadline. If you owe the IRS, you will have to pay the amount due plus interest, but if the IRS owes you, you will receive your tax refund plus interest.
You should keep your tax returns indefinitely, but you should keep your tax records for 5 years.
IRS Audits
After a tax return is file, the IRS will match the tax returns with reports from employers, banks, and brokerage firms. If something is mismatched, the IRS will send a letter to the taxpayer. The majority of audits are considered correspondence audits. A face to face meeting with the auditor is not required. The taxpayer will simply mail in all supporting documentation requested.
Installment Plans
If you owe the IRS money, you can set up a payment plan. The fee to set up a plan is $105. If you set up the payment to be directly debited from your account, the plan fee is $52. Interest plus late payment penalties are due on all balances.
Estimated Tax Payments
Income tax must be paid through withholding or estimated tax payments as income is earned or received. If enough tax isn’t paid in during the tax year, the IRS may charge a penalty for the underpayment of tax. Taxpayers will avoid this penalty if they paid at least 90% of the tax owed for the current year, or 100% of the tax shown on the prior year tax return, whichever is smaller.