Featured Content

MWE featured news,
articles, videos and more.

It’s Tax Time Again for the Millions Who Got an Extension

MWE Headshots Thumbnail LanceChristensen - It’s Tax Time Again for the Millions Who Got an ExtensionBack in April, many Americans (about one in 10 filers), asked for and received a six month extension to file their 2018 federal income tax returns. The new deadline is today, October 15th. The New York Times caught up with MWE partner Lance Christensen to learn more information about the new deadline and what penalties could be levied if a taxpayer still hasn’t filed or paid.

 

New York Times Logo

Back in the spring, millions of Americans asked for and received six additional months to file their federal income tax returns.

Now, the extension is almost up. The new deadline is Tuesday.

“Time is running out,” said Lance Christensen, a tax partner at Margolin, Winer & Evens in Garden City, N.Y. “They have to file.”

A record 15 million people — about one in 10 filers — received automatic, six-month filing extensions for their 2018 returns, according to the Internal Revenue Service. (That was up from 14.7 million the year before.) Sweeping changes to the tax code under the Tax Cuts and Jobs Act of 2017 were behind the torrent of extensions, according to tax professionals and the I.R.S.

Missing the extended deadline could mean penalties from the I.R.S. for failing to file and — if the filer still owes taxes — failure to pay. The extension allowed an extra six months to file a return but no extra time to pay. (Late filers are supposed to estimate what they owe and pay by the original April deadline.) So penalties may already be accruing for those who haven’t paid, and will grow if the October deadline is missed, too.

If someone owes taxes but doesn’t have the money to pay the full balance, it’s still best to file a return, Mr. Christensen said. People are often reluctant to call the I.R.S., but it’s better to initiate communication with the agency and discuss your circumstances, he said. Contact the I.R.S., explain your situation and seek an agreement to pay the bill over time, he said. That way, you’ll avoid late-filing penalties.

“You’re better off filing,” he said, “ even if you can’t pay.”  Read More>>>

 


Webinar: Fall 2019 State and Local Tax Update

Salt Screenshot Halloween 2019

Back in the spring, millions of Americans asked for and received six additional months to file their federal income tax returns. Now, the extension is almost up. The new deadline is Tuesday. “Time is running out,” said Lance Christensen, a tax partner at Margolin, Winer & Evens in Garden City, N.Y. “They have to file.” A record 15 million people — about one in 10 filers — received automatic, six-month filing extensions for their 2018 returns, according to the Internal Revenue Service. (That was up from 14.7 million the year before.) Sweeping changes to the tax code under the Tax Cuts and Jobs Act of 2017 were behind the torrent of extensions, according to tax professionals and the I.R.S. Missing the extended deadline could mean penalties from the I.R.S. for failing to file and — if the filer still owes taxes — failure to pay. The extension allowed an extra six months to file a return but no extra time to pay. (Late filers are supposed to estimate what they owe and pay by the original April deadline.) So penalties may already be accruing for those who haven’t paid, and will grow if the October deadline is missed, too. If someone owes taxes but doesn’t have the money to pay the full balance, it’s still best to file a return, Mr. Christensen said. People are often reluctant to call the I.R.S., but it’s better to initiate communication with the agency and discuss your circumstances, he said. Contact the I.R.S., explain your situation and seek an agreement to pay the bill over time, he said. That way, you’ll avoid late-filing penalties. “You’re better off filing,” he said, “ even if you can’t pay.” The penalty for filing late is 5 percent of the tax that is owed, for each month (or partial month) the payment is late. The failure-to-pay penalty is 0.5 percent of the amount unpaid, also charged monthly. (Penalties are capped at 25 percent of the tax owed.) The I.R.S. is often willing to waive the penalties for those filing or paying late for the first time, said Shannon Hudson, a certified public accountant and partner at Altair Group in Bedford, N.H. An abatement is not guaranteed, she said, but If you have a good track record, “more often than not, they’ll abate it.” The good news is that if you’re due a refund, you won’t owe any penalties. But if you are owed money, it’s best to file a return and collect it, Ms. Hudson said, because there is a window of three years for collecting a refund. So anyone who is due money should file as soon as possible. The average refund is more than $2,700, the I.R.S. said. If your refund is much larger (or smaller) than expected, it may be a good idea to check how much is withheld from your paycheck each pay period. You can increase or decrease your withholding by filing a new Form W-4 with your employer. The I.R.S. W-4 online withholding estimator can help you fill out the form. The I.R.S. grants limited exceptions to the October deadline — for example, taxpayers in federally declared disaster areas may get more time to file. A list of affected areas is available on the I.R.S. website. Here are some questions and answers about the extended filing deadline: If I’m due a tax refund, how long will it take to arrive? Most refunds are issued within 21 days after the return is accepted, the I.R.S. says. Filing your return electronically and choosing a direct deposit of your refund helps speed things along. You can check the status of your refund online or with an I.R.S. mobile app. What if I need help filing my return, but I don’t have the money to pay a professional? A few free tax-preparation sites, including those run by the I.R.S.’s Volunteer Income Tax Assistance program, remain open through October. At the sites, I.R.S.-trained volunteers help people — generally, those making $56,000 or less — prepare their returns. You can search online by ZIP code for a location near you. Be sure to call first, to confirm that the site is operating. (Note that tax help locations operated by the AARP Foundation Tax-Aide program are closed until January.) If you must file yourself, no-cost filing options are available on the I.R.S. Free File website through Tuesday. Is there any way to reduce my 2018 tax bill at this point? If you are self-employed or own a small business, you may be able to fund an individual retirement account known as a “simplified employee pension,” or S.E.P. I.R.A., and deduct the amount you contributed from your taxable income, Ms. Hudson said. The deadline for S.E.P. contributions, if you received a filing extension, is Tuesday. If you qualify, you can contribute as much as 25 percent of your net earnings, up to a limit of $55,000 for 2018.
Contact Us
reCAPTCHA
Sending
Long Island

400 Garden City Plaza, Fifth Floor, Garden City, NY 11530
T 516.747.2000 // F 516.747.6707

New York City

757 Third Avenue, Suite 2002, New York, NY 10017
T 212.973.1000 // F 212.973.1004

Grand Cayman

27 Hospital Road, Fifth Floor, P.O. Box 1748GT
George Town, Grand Cayman, Cayman Islands, B.W.I