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Individual Tax Returns

You Owe the IRS? No Worries – You have Options

Next to public speaking and the proverbial IRS audit, owing individual or business income taxes is one of our biggest fears. When filing your last income tax return, did you show a balance due to Uncle Sam you still can’t pay?

Worse yet, did you fail to file your tax return because you owed a balance?

What should you do now? If you owed money with your tax return, don’t ignore it! Your debt won’t go away and will only compound your money owed.

Thankfully, the IRS offers several options, one likely to suit your needs:

  • File your income tax return as soon as possible. If your return is more than 60 days past the due date or requested extension period, you’ll owe a penalty of $135 or 100% of your unpaid tax.
  • Pay as much as you can now. If you have funds available to pay even a portion of your tax bill, pay it. The IRS charges interest on overdue taxes, so reducing your debt also decreases your interest.
  • Request a payment plan. Simply apply online or request advice from your accountant (or from P&R, of course!). A short-term payment plan gives you up to 120 days to pay the balance. If you require more time, enter into an installment agreement.
    • Installment agreements for businesses offer up to 24 monthly payments on balances of $25,000 or less (including penalties and interest), for current and prior year obligations only.
    • Installment agreements for individuals allow up to 72 monthly payments on balances of $50,000 or less (including penalties and interest).
  • Apply for an offer-in-compromise. If you owe more than you can pay in full, with or without a payment agreement, you may need to resort to an offer-in-compromise. This option isn’t for everyone; use the pre-qualifier tool as a guide to determine if a potential offer might be accepted.
  • Consider your best payment options:
    • Check or money order. Make sure you make it payable to United States Treasury, and put the primary taxpayer’s Social Security number and tax year in the memo section.
    • Electronic Federal Tax Payment System (EFTPS). Both business owners and individuals may authorize the IRS to withdraw the payment directly from a savings or checking account (business owners should provide two separate accounts if they want to use EFTPS to pay both business and personal taxes). Register at least one week prior to transferring your first payment. Afterwards, you will have the option to schedule payments up to one year in advance.
    • Direct Pay. This option is offered to individuals only, with no requirement for pre-enrollment. Again, funds are withdrawn from your bank account and you can schedule payments up to 30 days in advance.
    • Credit or debit card. Be prepared to pay additional service fees charged by your financial institution or card processor. The IRS requires the full balance due and will not pay the transaction fees!

If you owed money this year, and especially with the new tax reform law, use the IRS’ Withholding Calculator to ensure your paycheck withholding amount is appropriate, or you’re paying enough in estimated taxes to avoid this situation next year.

Owing the IRS can be a costly matter, but less so—and more manageable—if you don’t ignore it. If you’re not one of the lucky refund taxpayers but owe a balance instead, make the effort to pay what you can and consider one of the IRS alternatives to satisfy the balance.

If your tax preparation is too complex for you to manage alone, the experienced accounting staff at Patrick & Raines CPAs will be happy to talk with you…and could very likely relieve some of your stress!

Contact us at Office@CPAsite.com or 904-396-5400.

Still waiting for your tax refund?

The IRS issues most refunds within 21 days of receiving your individual tax return, but sometimes a delay occurs. If 21 days passed and you haven’t yet received your refund, don’t panic; several reasons could justify the holdup.

Since the agency now falls victim to numerous fraudulently filed returns, agents approach issuing some refunds more cautiously, which can result in processing delays.

Whether you’ve waited longer than expected or you’re just curious, use the IRS’ “Where’s My Refund?” tool to track your reimbursement. Be prepared: you’ll need the social security number of either the taxpayer or spouse, the filing status (married filing joint/separately, single, head of household), and the exact refund amount you’re expecting.

You can also access this data from your phone on the IRS2Go app.

Either way, wait at least 24 hours after filing your return electronically, or four weeks after mailing it.  The information updates once-a-day.

If you e-filed your return more than three weeks ago or mailed it six weeks ago, call the IRS to speak to an agent. Allow plenty of time though, as hold times are long.

We understand the frustration of late refunds and hope the IRS resources help answer your questions. If you still need further guidance on this or other tax accounting issues, contact the Patrick & Raines CPAs team at Office@CPAsite.com or (904) 396-5400.

Join the IRS for Free Tax Reform Webcasts

As a small business owner, responsible for both your individual and business tax return, are you wondering how the new tax reform legislation, the Tax Cuts and Jobs Act, might affect both you and your employees next year? No worries; the IRS will try to ease your concerns.

In support of National Small Business Week, April 30 – May 4, the IRS is offering free webcasts geared toward educating small business owners on the effects of the new law.

An additional webcast, “the Paycheck Checkup” offers guidelines regarding your employees’ current withholding status and individual income tax return. Considering the 2018 tax changes may cause some big impacts to refund checks, reminding employees to take the correct tax amount out of their paychecks is imperative to help them avoid owing Uncle Sam next filing season.

The 30-minute webcast sessions will be available twice each day, and you can register by clicking the appropriate link to be redirected to the registration page:

  • Session 1– 11 a.m. (ET), 10 a.m. (CT), 9 a.m. (MT), 8 a.m. (PT), 5 a.m. Hawaii
  • Session 2– 1 p.m. (ET), 12 p.m. (CT), 11 p.m. (MT), 10 a.m. (PT), 7 a.m. Hawaii
Webcast Date Topic Registration Link
Monday, April 30 Can I Deduct This? (OIH, Meals, Transportation, Cell Phone) Register for Session 1

Register for Session 2

Tuesday, May 1 Employee v. Independent Contractor Register for Session 1

Register for Session 2

Wednesday, May 2 Pay Now? Pay Later? Can’t Pay? (payment options) Register for Session 1

Register for Session 2

Thursday, May 3 Small Biz Resources @ Your Fingertips (irs.gov, safeguarding data, etc.) Register for Session 1

Register for Session 2

Friday, May 4 Paycheck Check-Up Register for Session 1

Register for Session 2

You can even join the webcasts from your smartphone or tablet. The WebEx app is available from both the Android and Apple stores. For more information on mobile apps, visit the WebEx Products page.

Since the new tax law is the largest tax reform legislation in 30 years, you should definitely take advantage of these free informative webcasts. Should you have any questions, refer to the IRS website: https://www.irs.gov/businesses/small-businesses-self-employed/webinars-for-small-businesses.

Of course, we can help you navigate the new tax landscape. For more than three decades, Patrick & Raines CPAs has been privileged to provide complex individual and business tax return services and small business advice to help our clients gain the results they desire.

For your tax planning and preparation, assurance needs, accounting services and more, contact us at Office@CPAsite.com or 904-396-5400.

The Ticking Clock Is About to Ring: Time to File Your 2017 Tax Extension

NOW is the time to make that honest assessment: will I be able to file my individual income tax return by April 17? If not, no shame exists to filing an automatic extension.

So if you need more time to assemble your data or track down missing tax documents, file IRS tax extension Form 4868 by mail or electronically by April 17. (Electronic filing includes a receipt acknowledgement from the IRS.)

Keep in mind an extension only pushes back the due date for filing your tax documents, not for paying owed taxes. If you believe you owe money for the year, you must estimate the amount and pay it by the April deadline to avoid penalty and interest charges. You’ll then gain six more months, until October 15, 2018, to file your completed return.

If you need to pay owed taxes, you can pay by credit card either via electronic payment online or by calling the IRS directly. Consider these guidelines if you file an extension:

  • If the IRS thinks your estimated owed tax is unreasonable, it may disallow your extension and assess a late filing penalty.
  • If you underestimate the amount of taxes owed, you’ll owe interest on whatever amount you fail to pay by the April 17th
  • If you pay less than 90% of your estimated owed taxes, you’ll end up paying a penalty of 0.5% of the underpayment every month until you pay the remaining balance. For example, if you pay $600 by April 17th, but discover after completing your return that you really owe $1000, you’ll owe 0.5% per month on the overdue amount of $400 – about $2 a month – until the entire amount is paid in full.

Taxpayers often worry about an audit when filing for a tax extension, but they shouldn’t according to the IRS:

Filing a tax extension does not increase your chance of an audit. Conversely, not filing a tax extension and instead filing a hurried tax return [with mistakes] can increase your chance of an audit.”

So if that honest assessment screams you need more time, relax and take it. Estimate your tax and pay what you owe by April 17 and send it in with your extension. Of course, if Uncle Sam actually owes you money, your refund will be delayed until the IRS receives your tax return—so you’ve got some incentive not to wait the full six months!

Need assistance completing an accurate extension for your 2017 income tax return? Contact the experienced tax accountant team at Patrick & Raines CPAs for help: Office@CPAsite.com or 904-396-5400.

Scammers Targeting Tax Preparers—and We’re Ready

As the filing deadline for your individual income tax return approaches, the unscrupulous identity thieves shift into high gear, knowing taxpayers and their preparers are under more pressure and could make careless mistakes.

While we’re certainly not perfect, we’re doing all we can to protect your identity, your financial planning records and, of course, your tax refund.

You may have seen a recent USA Today story about the scammers specifically targeting tax professionals. The statistics are sobering. According to the story, “About 75 firms acknowledged taxpayer data thefts in January and February—a nearly 60% increase from the same time last year.”

Rest assured we’re on the lookout for the crooks’ latest tactics, such as:

  • Introducing themselves as prospective—or desperate—new clients and sending us attachments, supposedly their W2’s and other tax documents. They’re actually viruses—some providing remote access to the infected computer—they hope we’ll download on our computer system.
  • Filing in your name, with all your data stolen elsewhere, and we find out when you call us to say you’ve already received your refund, and we haven’t finished your return yet!

The fraudster’s next step is to call and tell you he or she  works for one of the IRS’ out-sourced collection agencies and  the money was deposited in error, which the IRS calls an “erroneous refund,” and you must forward that money to them immediately.

Don’t do it! Hang up and call us immediately. We’ll connect you to the IRS Criminal Investigation Division.

In addition to being on the lookout for the tricks and scams, we use the latest anti-virus, anti-malware protection and protocols to protect you and your records.

We do ask you to do your part: use our secure portal, or ask us to send you a link in an email. We know we’re asking you to take extra steps, but our request protects both of us. So, please, never send us your sensitive documents in an unsecure Email!

We remain committed to your financial success—and security. Our tax accounting professionals pride themselves on serving, and protecting, you.

Income tax day is less than two weeks away so contact us if we can help: Office@CPAsite.com or (904) 396-5400.

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