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Tax Guide 

IRS Tax Law Changes

Americans Abroad

Capital Gains, Interest and Dividends

Deductions

Dependents

Education Credits, Scholarships

Foreign Bank Reporting

Foreign Nationals

Social Security, Medicare, Self Employment Tax

State Taxes

Tax Deadlines, Extensions, Late Payments, Estimated Tax

Tax Resident, Nonresident, Dual Status

Other Topics

Tax Deadlines, Extensions, Late Payments, Estimated Tax


 

Tax Deadlines

 

March 15 - Last day to file corporate and partnership returns.
April 15 - Last day to file regular individual returns or request an extension.
June 15 - Automatic extension filing deadline for Americans living abroad. Only extends time to file, not to pay. Interest will be assessed on any balance due from April 15, but you won't have to pay late filing penalties.

September 15- Extension deadline for partnership and S-Corp tax returns.

October 15- Extension deadline for individual and C-Corp tax returns.

Please be aware that extensions give you extra time to file, not to pay. If you have a refund coming, you don't have to worry; there will be no interest or late penalties. If you owe, extensions get you out of late filing penalties, which, at 5% per month (maximum 25%) of the balance due, are the stiffest one, but you would still owe interest and late payment penalties (1/2 % per month).

Note: Any year that a deadline falls on a weekend, it is extended to the following Monday or Tuesday.

Extensions

Note: There is no penalty for filing an extension. In fact, I file an extension for my own return every year. If I have not completed your tax return by April 15, I will automatically file an extension for you free of charge, and will complete your tax return as soon as possible afterward.

For tax year 2018, the federal deadline is April 15, 2019.

If you can't meet the tax filing deadline to file your tax return, you can get a six-month extension of time from the IRS. If you have a refund coming, you don't have to worry; there will be no interest or late penalties. If you owe, extensions get you out of late filing penalties, which, at 5% per month (maximum 25%) of the balance due, are the stiffest ones, but you would still owe interest (federal short term rate plus 3%) and late payment penalties (1/2 % per month) after April 15. If you think you will owe tax, you may send a payment for the expected balance due by April 15, but this is not required to obtain the extension.

The failure-to-file (i.e. late filing) penalty for returns filed more than 60 days after the due date (including extensions) is increased. In this situation, the minimum penalty is the smaller of $135 or 100% of the unpaid tax.

If you will be sending in payment with your federal extension by April 15, mail Form 4868 with a check or pay online at IRS Payments. For New York State, use Form IT-370 or file a NY extension online or pay NY tax online. The IRS and most states allow extensions with payments to be filed electronically. I can set it up for you.

Americans living abroad:  If you reside outside the U.S., you have an automatic 2 month extension to file until June 15. However, if there is a balance due, interest will be assessed on it starting after April 15. There is no penalty for being late if you owe no tax.   If you recently moved abroad and you need additional time beyond October 15 to to meet the substantial presence test or bona fide residence test, you can file Form 2350.  If you need an additional 2 months to file your tax return beyond the regular extension deadline (to December 15), you can request the additional extension in writing to the IRS.  See Publication 54.

Late Payment - Interest and Penalties

Interest, compounded daily, is charged on any unpaid tax from the due date of the return until the date of payment. The interest rate is the federal short-term rate plus 3 percent. That rate is determined every three months.

In addition, if you filed on time but didn't pay on time, you'll generally have to pay a late payment penalty of one-half of one percent of the tax owed for each month, or part of a month, that the tax remains unpaid after the due date, not exceeding 25 percent. However, you will not have to pay the penalty if you can show reasonable cause for the failure. The one-half of one percent rate increases to one percent if the tax remains unpaid after several bills have been sent to you and the IRS issues a notice of intent to levy.

If you filed a timely return and are paying your tax pursuant to an installment agreement, the penalty is one-quarter of one percent for each month, or part of a month, that the installment agreement is in effect.

If you did not file on time and owe tax, you may owe an additional penalty for failure to file unless you can show reasonable cause. The combined penalty is 5 percent (4.5% late filing, 0.5% late payment) for each month, or part of a month, that your return was late, up to 25%. The late filing penalty applies to the net amount due, which is the tax shown on your return and any additional tax found to be due, as reduced by any credits for withholding and estimated tax and any timely payments made with the return. After five months, if you still have not paid, the 5% failure-to-pay penalty continues to run, up to 25%, until the tax is paid. Thus, the total penalty for failure to file and pay can be 47.5% (22.5% late filing, 25% late payment) of the tax owed. Also, if your return was over 60 days late, the minimum failure-to-file penalty is the smaller of $135 or 100% of the tax required to be shown on the return.  For more information, see IRS Notices and Bills, Penalties and Interest Charges.

New York State - Interest and Penalties

New Jersey - Interest and Penalties

Estimated Tax


The United States income tax system is a pay-as-you-go tax system, which means that you must pay income tax as you earn or receive your income during the year. You can do this either through withholding or by making estimated tax payments.  If you didn't pay enough tax throughout the year, you may have to pay a penalty for underpayment of estimated tax.  The requirements for determining who must pay estimated tax are the same for a U.S. citizen or resident abroad as for a taxpayer in the United States.

In general, you may owe the penalty for 2018 if the total of your withholding and timely estimated tax payments didn't equal at least the smaller of

1.   90% of the tax to be shown on your 2018 tax return, or
2. 100% of the tax shown on your 2017 tax return or
3. 110% of the tax shown on your 2017 tax return if your AGI for 2017 was more than $150,000 ($75,000 if your filing status for 2018 is married filing a separate return)

The tax return must cover all 12 months.  For 2017, AGI is the amount shown on Form 1040, line 37.

Generally, taxpayers should make estimated tax payments in four equal amounts to avoid a penalty. However, if you receive income unevenly during the year, you may be able to vary the amounts of the payments to avoid or lower the penalty by using the annualized installment method. 

Making a Federal Estimated Tax Payment
Federal estimated tax payments are submitted with Form 2201.   The easiest way to make a payment is through the IRS Direct Pay.  Choose Direct Pay - Make a Payment - under "Reason for Payment, select "Estimated Tax".

2018 Estimated Tax Payment Due Dates
Four equal amounts by the dates shown below.
1st payment ................. April 17, 2018
2nd payment ................ June 15, 2018
3rd payment ................. Sept. 17, 2018
4th payment ................. Jan. 15, 2019

2019 Estimated Tax Payment Due Dates
Four equal amounts by the dates shown below.
1st payment ................. April 15, 2019
2nd payment ................ June 17, 2019
3rd payment ................. Sept. 16, 2019
4th payment ................. Jan. 15, 2020