U.S. Tax Preparation Worldwide
James Maertin CPA
IRS Tax Law Changes
Interest and Dividends
Foreign Bank Reporting
Social Security, Medicare,
Self Employment Tax
Extensions, Late Payments, Estimated Tax
Tax Resident, Nonresident, Dual Status
Tax Deadlines, Extensions, Late
Payments, Estimated Tax
March 15 - Last day to file corporate
April 15 - Last day to file regular individual returns or request an
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.
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
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
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
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
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
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
New Jersey - Interest and Penalties
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
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
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
Making a Federal
Estimated Tax Payment
Federal estimated tax payments are submitted with
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
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