Taxes

What Happens If I Don’t Pay My Taxes

by

Doing income taxes can be a trying time for many taxpayers. There are numerous forms to fill out, cumbersome calculations to perform, not to mention, the rules change every year. When you finally finish, you might end up owing a lot of taxes to the government. The IRS isn’t know for being forgiving, but that doesn’t stop people from wondering, what happens if I don’t pay my taxes? Failure to File Taxes First, it is important to distinguish between not filing your income taxes, failure to file, from not paying your income taxes. There are significant additional penalties for not filing your income taxes on time. If you can pay your taxes, but can’t get them done on time, then consider filing a Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax. Filing this form grants taxpayers an automatic extension of time to file. This form must be filed by the April 15th filing deadline just like a regular tax return would be. Once filed, the new deadline for filing your taxes moves to the beginning of October. Beware, even if you file for an extension, you do NOT get any additional time to pay …

Read More

What Obamacare Deadline Really Means for Your Money

by

If you’re here to complain, debate, inflame, or otherwise argue about whether or not Obamacare is a good or bad thing, let me stop you right there. This is a personal fiance website, not a political forum. Go debate the merits of policy somewhere else. This article is about the finances of Obamacare and the upcoming March 31 deadline. If you have a comment about that, or something I missed, let’s hear it. If you want to say how good or bad this law is, don’t bother, I won’t approve it. Obamacare Deadline March 31 Alright, with that out of the way, let’s jump right in. The law popularly known as Obamacare is actually called the Affordable Care Act. This is strange, because Congress usually goes out of its way to come up with an acronym for every big law it passes. However, this law states that you must be covered by health insurance by March 31. So, now what? First off, if you have health insurance that you get through your or your spouse’s company, stop reading and go have a latte. Nothing in this law pertains to you or your current situation. Second, if you already have health …

Read More

What Happens If You Don’t File Your Taxes On Time

by

What happens on April 15?  For those of you from non-US countries, that probably doesn’t mean much.  To us Americans, April 15th is Tax Day, the deadline to file tax returns. Yup, and entire day taken over and corrupted by government. Well, I guess those interstates won’t pave themselves for free. If you’re working at the last minute then you might be looking for last minute tax tips.  Of course, what many people really want to know is what happens if you don’t file your taxes by the deadline and is there anything I can do if I can’t get my taxes done? The answer, actually, is surprisingly benign.  Filing late is a no-no and can result in all kinds of problems, not the least of which are penalties.  But, there is a ray of hope.  Instead of filing your tax return, file for an extension.  One extension is granted automatcially, so all you have to do is send in the form.  If you can’t get your taxes done by April 15, then make sure you file your request for extension in its place to avoid penalties, fees, and interest. If you file for an extension when are your taxes due?  …

Read More

Will IRS Really Settle Tax Debt for Pennies on the Dollar?

by

The latest radio commercials claim that if you owe the IRS $10,000 or more in back taxes or delinquent tax, that there are government programs that will help you settle that tax debt for pennies on the dollar. They go on to say that, with this company’s help, of course, you can make you tax debts go away, including fees and penalties. Sound too good to be true? It probably is. How IRS Settles Delinquent Tax Debts In many ways, the IRS is just like any other creditor. If someone owes them money, then they want to get paid that money. However, in many other ways, the IRS is unlike any other creditor out there. For most companies, collecting on a delinquent debt is a cost-reward calculation. The amount of possible debt recovery is compared to the cost of getting that money. For a very large debt from someone with the means to pay it, it is worth it to engage lawyers and go to court to seize assets and garnish wages. For smaller debts, or for debtors with no assets, the cost of collecting the debt isn’t worth it. There comes a point where trying to collect the debt …

Read More

Amazon and TurboTax Refund Special

by

So, I haven’t had a chance to dig through all the details yet (I will soon), but there is a new wrinkle in the tax software refund game. Consider this your, “Wait, there might be a good option here before you buy,” post, not your go for it post. For several years, there have been various offers about what to do with your tax refund. For example, H&R Block got into trouble a few years ago by directing refunds into IRA accounts that had fees and charges that made them a bad deal. This year, TurboTax has an interesting new twist for Amazon shoppers. Amazon Gift Card Bonus from TurboTax TurboTax is one of the most popular tax software packages. (Look for full details and review of TurboTax and Tax Cut coming soon on Finance Gourmet.) There are tons of ways to buy TurboTax including online, via direct download, and of course, via boxes of software in stores. The first rule of buying TurboTax is never pay full price. There are always sales, and deals, and bundles of software that make buying TurboTax cheaper. The most common offer bundles Quicken, which is also an Intuit product with the tax software, …

Read More

IRS Mileage Rate 2014

by

Note: The latest standard mileage rate deduction amount from the IRS can be found at the updated, current article. Here come the end of year numbers from the IRS for 2014. Recently, the Internal Revenue Service released the official 2014 standard mileage rates. Keep in mind that these are the number for miles driven during 2014. You’ll be using the 2014 numbers in early 2015 when you are filing your 2014 taxes. If you need the mileage rates for 2013 those are the one you use for the income taxes you are filing in early 2014. 2014 Mileage Rate Deduction Standard As always, the IRS allows two ways to deduct expenses associated with tax deductible use of a motor vehicle. The taxpayer may claim either the actual expenses for vehicle, or claim a standard amount per mile instead. To claim the actual expenses for driving an automobile for deductible reasons, the taxpayer must keep complete records of all expenses occurred during the year. Considering how complicated filing income taxes is in the first place, why add another layer of complexity by keeping even more records, and making even more calculations. The 2014 Mileage Rates are: 56 cents per mile for …

Read More

IRS Identity Theft Issue

by

The IRS holds a special place in the American psyche. The concept of taxes and the taxman are widely despised by many Americans, even though the efficient collection of taxes is a key component of running a modern democracy. Even though the IRS is often cast as the bad guy, it is never cast as an inept one. In fact, far from it, the IRS is often portrayed as a powerful, all knowing, governmental entity that must never be cheated. If that is so, then why is Congress investigating widespread identity theft and tax fraud allowed by the IRS. IRS Tax Fraud via Identity Theft The legend goes a little something like this. An average American taxpayer files his income taxes. When he does so, he submits some documentation, but most of what goes on the typical tax form requires no documents actually be sent to the IRS. Rather, the taxpayer must keep those documents as proof, just in case the IRS comes asking via the dreaded tax audit. Each year, the IRS audits something around one percent of all tax returns. Of that amount, a certain number are just randomly selected for review by a computer. Others, we are …

Read More

Tax Season Bumped Back by IRS

by

The IRS announced that it was moving back the beginning of tax filing season due to the government shutdown. Apparently, workers finalizing tax forms and systems for the end of the 2013 tax year and getting them ready for the 2014 filing season were not part of the essential government workers that kept working during the recent government shutdown. As a result, the IRS is about two weeks behind on getting ready for the tax filing season. The original date when taxpayers were first allowed to file tax returns was supposed to be January 21, 2014. However, after having basically making no progress during the 16-day shutdown, that date is being moved back. Although no official date has been set for when the IRS will begin accepting 2014 returns, the agency announced a “one- to two-week delay.” That means that the earliest date would be January 28, 2014 and the latest start date would be February 4, 2014. The delay is not due to big changes to paper forms, but rather to ensuring that the electronic systems for filing, as well as the electronic tax preparer data provided to firms like TurboTax, are up to date. In addition, the IRS …

Read More

IRS Mileage Rate 2013

by

The current IRS standard mileage deduction amount is in the updated article. One of the most common tax deductions is deducting miles driven for business purposes. Even if you can’t deduct your mileage because your employer reimburses you, chances are that reimbursement rate is set to the IRS standard mileage rate. Of course, you may also deduct your actual expenses for operating a motor vehicle rather than taking the standard rate per mile. However, this requires that you keep all receipts for any expenses and properly account for a variety of complicated factors. Most small businesses and self-employed individuals use the standard rates which is simpler, and in most cases, just a generous as deducting actual expenses. Standard IRS Mileage Rate Chart There are actually three different types of IRS mileage rates for 2013. For miles driven for business, the IRS rate per mile is 56.5 cents for each mile driven. For miles driven for medical purposes, or for taxpayers deducting moving expenses, the standard IRS rate per mile is 24 cent for each mile driven. For miles driven for charitable purposes, the standard deductible mileage rate is 14 cents per mile for each mile driven. The standard deduction mileage …

Read More

Taxes Due April 15 2013

by

Don’t forget (as if you could) that your federal income taxes are due on April 15 in 2013. For the past two years, taxes were actually due on April 16th, thanks to weekends and a holiday last year in Washington D.C. No such reprieve this year, Monday April 15 is the income tax deadline for 2012 taxes being filed in 2013. If you don’t file your taxes on time, there can be some pretty stiff penalties and interest. Don’t forget, you can get an automatic six month extension to file your taxes by submitting a Form 4868 to the IRS by April 15th instead of your actual 1040 tax forms. You still have to pay your best estimate and you’ll be on the hook for any taxes due that you miss, but it is still better than not filing. If you don’t pay your taxes, they can always come after your wages and hold any future refunds. For small business owners and the self-employed, it sometimes gets lost in the shuffle of the bigger income tax deadline, but the first estimated quarterly tax payment for 2013 is also due to the IRS on April 15th. The next estimated quarterly tax payment for 2013 will …

Read More