With yet another tax season underway here are some frequently asked questions and answers that come up around this time of the year:
I’ve filed, but where is my refund?
You can go online to check the status of your tax refund 72 hours after IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after you mail a paper return. Be sure to have a copy of your just filed tax return available because you will need to know your filing status, the first Social Security number shown on the return, and the exact whole-dollar amount of the refund. You have three options for checking on your refund:
– Go to irs.gov and click on “Where’s My Refund”
– Call 800-829-4477~24 hours a day, seven days a week, for automated refund information.
– Use IRS2Go. If you have a smart phone you can download an application to check the status of your refund.
What if I made a mistake on my tax return?
Mistakes are common, but the key is fixing them as soon as you discover them. If you find an error on your return, you can correct your return by filing an amended return using Form 1040X, Amended U.S. Individual Income Tax Return.
How to file a tax extension
The IRS says it received requests for 11 million extensions, which amounts to about 8% of all tax returns. Taxpayers who ask for an extension get an extra six months to file—your new deadline will be Oct. 18. You can get some extra time without any hassle. Simply e-file for a Personal Tax Extension of your federal tax return using TurboTax Easy Extension. You can also file for an extension on the IRS website.
Important things to remember when you request an extension
First, a federal extension does not automatically extend the deadline for your state income tax return. Also, an extension to file your federal taxes does not give you an extension to pay your actual tax bill. You still have to figure out your taxes and make an estimated payment. Estimating how much money you’re going to owe can take time, so please do not wait till the last minute until to get started. Last year’s tax return could be a good starting point if you haven’t experienced any major life changes. If that is the case, you can probably pay the same amount in taxes for the current year that you paid in the past year.
Don’t ignore the IRS if filing late or you owe more than you can pay
The key to surviving last-minute tax filing is realizing that the IRS will not be ignored. These guys aren’t kidding around when they set deadlines. The IRS wants your paperwork, and it wants it now. If you don’t file your return today and you owe taxes, you may owe an additional penalty for failure to file unless you can show reasonable cause. The assessment is 5 percent per month (or any part of a month, even just a day) of your balance due.
Even if you file on time but don’t pay what you owe, the IRS can charge you. This nonpayment penalty is one-half of 1 percent of the tax due each month, or any part of a month, that isn’t paid. The fine continues until it reaches 25 percent of your late payment. If both penalties apply in any month, you get a small break on the failure-to-file penalty. The IRS will reduce it by what it’s charging you for not paying, making your potential maximum nonfiling penalty “only” 22.5 percent. (Read more: You must file something! Here’s how)
IRS Tax Installment plan
Hopefully by now you will realize that it is better to pay your taxes than avoid them. So if you are having troubles with finding the money to pay your taxes, consider an IRS monthly installment plan. You even get to pick your monthly payment amount and the day it will be due. In fact, if you’ve previously filed — and paid — taxes on time, your tax bill is less than $10,000 and you convince the IRS that you can’t come up with that much all at once, the agency can’t turn down your request. Your installment plan, however, must pay off the due tax in at least three years. To get the program going, attach Form 9465, Installment Agreement Request, to the front of your tax return. Financially strapped taxpayers also can use an installment plan to make partial payments of tax liability. (See more IRS payment options)
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