Tuesday, April 15, 2014

IRS Tax Extension, Last Minute Filing Tips


The April 15, 2014 federal income tax-filing deadline is today.  The Internal Revenue Service offers the following tips for last-minute 2013 tax year filers to check their tax returns for common errors: 
 
File taxes electronically. The IRS says that filing electronically, whether through e-file or IRS Free File, vastly reduces tax return errors, as the tax software does the calculations, flags common errors and prompts taxpayers for missing information. 


Mail a paper tax return to the right address. Paper filers should check IRS.gov or their form instructions for the appropriate address where to file to avoid processing delays.


Take a close look at the tax tables. When figuring tax using the tax tables, taxpayers should be sure to use the correct column for the filing status claimed.


Fill in all requested information clearly. When entering information on the tax return, including Social Security numbers, take the time to be sure it is correct and easy to read. Also, check only one filing status and the appropriate exemption boxes.


Get the right routing and bank account numbers. Requesting direct deposit of a federal refund into one, two or even three bank accounts is convenient and allows the taxpayer access to his or her money faster. Make sure the financial institution routing and account numbers entered on the return are accurate. Incorrect numbers can cause a refund to be delayed or deposited into the wrong account.


Sign and date the return. If filing a joint return, both spouses must sign and date the return. E-filers can sign using a self-selected personal identification number (PIN).


Attach all required forms. Paper filers need to attach W-2s and other forms that reflect tax withholding, to the front of their returns. If requesting a payment agreement with the IRS, also attach Form 9465 to the front of the return. Attach all other necessary schedules and forms in the sequence number order shown in the upper right-hand corner.


Keep a copy of the return. Once ready to be filed, taxpayers should make a copy of their signed return and all schedules for their records.


Request a Filing Extension. For taxpayers who cannot meet the April 15 deadline, requesting a filing extension is easy and will prevent late filing penalties. Either use Free File or Form 4868. But keep in mind that while an extension grants additional time to file, tax payments are still due April 15.


The fastest and easiest way to get the extra time is through the Free File link on IRS.gov. In a matter of minutes, anyone, regardless of income, can use this free service to electronically request an automatic tax-filing extension on Form 4868.


Filing this form gives taxpayers until Oct. 15 to file a return. To get the extension, taxpayers must estimate their tax liability on this form and should also pay any amount due.


By properly filing this form, a taxpayer will avoid the late-filing penalty, normally five percent per month based on the unpaid balance, that applies to returns filed after the deadline. In addition, any payment made with an extension request will reduce or eliminate interest and late-payment penalties that apply to payments made after April 15.  The interest rate is currently three percent per year, compounded daily, and the late-payment penalty is normally 0.5 percent per month.


Besides Free File, taxpayers can choose to request an extension through a paid tax preparer, using tax-preparation software or by filing a paper Form 4868, available on IRS.gov. Of the more than 12 million extension forms received by the IRS last year, over 7 million were filed electronically.