House Ways and Means Committee Chairperson Dave Camp released draft legislation, the Tax Reform Act of 2014, proposing a wide variety of changes to America's tax system. In part 5 of a series, we look at proposals for changing employee benefits.
Filing a tax return after the April 15th deadline typically isn't any different than the normal procedures. Be sure you have all your tax-related documents for income and deductions, prepare your tax returns, review the return for completeness and accuracy, and file the tax return with the IRS. Tax software is still available. Web-based Free File tax software also remain operative through October 15th. (After October 15th, Web-based tax software will go offline to transition to next year's software system.)
The only a couple of extra things to remember about filing after April 15th.
First, remember to include any extension payment along with your other withholding and payments on your tax return.
Second, if you have a refund, the IRS typically won't assess any late fees. If you have a balance due, however, the IRS will assess a late payment fee along with interest.
Today, April 15th, 2014, is the day that tax returns are due to the IRS.
You either need to file your tax return or file an extension. I recommend filing an extension. An extension is a formal request for additional time to file a tax return. The IRS automatically grants extensions, as long as you file Form 4868 to ask for one.
Extensions can be filed online, sometimes for free or low cost. It takes about 20 minutes (give or take) to file an extension online. The extension will need to be submitted to the IRS before midnight in order to be valid.
You might also need to file an extension with your state.
Today is also the last day to:
- Fund an IRA for the year 2013;
- Fund an HSA for the year 2013;
- Pay the first quarter estimated taxes for 2014;
- File an original or amended 2010 tax return if you are due a refund.
The Internal Revenue Service has different addresses for different types of documents being mailed. Here's links to pages on the IRS.gov Web site with the relevant mailing addresses: Read More...
If you're planning on contributing to an individual retirement account (IRA), be aware that the deadline for making contributions for tax year 2013 is April 15, 2014.
People can contribute up to $5,500 to a Traditional IRA or Roth IRA or some combination of the two. Taxpayers age 50 or older may contribute $6,500. To be eligible to contribute to an IRA, a person needs to have income from wages, self-employment, or alimony.
Contributions to a traditional IRA are potentially tax-deductible. This is one of the few tax moves that a person can make to get more deductions and lower their tax liability. The deduction may be reduced or eliminated based on whether a person or his or her spouse is covered by a retirement plan at work.
Contributions to a Roth IRA are never tax-deductible. On the other hand, the earnings on the Roth IRA can potentially be tax-free. Eligibility for a Roth IRA is limited based on income.
Check this list and make sure you're on top of your retirement planning:
- Contribute to a Traditional IRA (contribute by 4/15 to get deduction on 2013 return)
- And/Or Contribute to Roth IRA (no deduction)
- Contribute to SEP IRA (for self-employed persons, 2013)
Other deductions to consider:
Feeling cramped for time? Prioritize on what needs to get done by April 15th.
1. Prepare your tax return, just enough to figure out if you owe and how much. Tax preparation software can help you draft out your tax return.
2. Pay any tax due by 4/15. Send in your payment along with your extension.
3. File an extension with your state as well, if needed.
4. Cannot pay by April 15th? That's okay, there's plenty of options for handling that situation.
5. File or amend your 2010 tax return if you have a refund. Federal tax refunds expire three years from the original April 15th due date. This April 15, 2014, refunds will expire for tax year 2010. If you need to file or amend your 2010 return, it will need to be postmarked on or before April 15, 2014. Use certified mail so you can document exactly when the return was mailed. See: tips on filing a late 2010 return.
Investors, Self-employed persons, investors and retirees
6. First quarter estimated taxes are due on 4/15. This typically applies to people who have income not covered by withholding, such as self-employed persons, investors, and retirees. These people will need to draft out a 2013 tax return to figure out how much their first estimated tax payment will be.
House Ways and Means Committee Chairperson Dave Camp released draft legislation, the Tax Reform Act of 2014, proposing a wide variety of changes to America's tax system. In part 4 of a series, we look at proposals for changing personal tax credits. Read More...
Mark your calendars, April 21, 2014, is this year's Tax Freedom DayŽ.
Every year, the Tax Foundation calculates the day when, on average, Americans have earned enough income to pay their federal and state tax bill in full. Supposing a person were to take all his or her income earned from the start of the year and use that money solely to pay their federal, state and local taxes. How long would it take for a person to pay their taxes in full? That's the concept behind Tax Freedom Day.
The Tax Foundation calculates a Tax Freedom Day based on the federal budget and projections for state and local taxes, and data from the Census and the Bureau of Economic Analysis. The Tax Foundation calculates a Tax Freedom Day for each state. The Tax Foundation calculates the total amount of federal, state and local taxes, and divides this by the nation's income to arrive at a ratio. This ratio is then expressed as a day of the year.
The Tax Foundation observes that Americans on average pay 30.2% of their income in federal, state and local taxes. Tax burdens vary from state to state, however. The following map showing Tax Freedom Days in each state:
Map Š and courtesy of the Tax Foundation.
To learn more, visit Tax Freedom DayŽ 2014 is April 21, Three Days Later Than Last Year.
Is it possible to spend money on deductions now and have the expense be deducted on our 2013 tax return? Yes, but only for the following types of deductions: Read More...
Individuals and businesses in Snohomish County, Washington, who have been impacted by mudslides and flooding have until October 15, 2014, to file tax returns and pay any taxes.
Map of the disaster area from FEMA.gov.
The Internal Revenue Service announced a variety of tax relief measures to assist taxpayers impacted by this disaster. Read More...