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Final tax return, payment deadline looms large

For those who pushed filing their tax returns off in the wake of COVID-19, the time has come to sit down and settle up.

Internal Revenue Service officials are reminding taxpayers that tax return deadlines eased in April due to restrictions stemming from the pandemic, including lock downs and restrictions on all but essential businesses, are again set in stone.

The original April 15 deadline to pay and file taxes was put off until July 15 due to efforts to slow the virus. Extensions for filing returns were available until Oct. 15, although taxes due were supposed to be paid by July 15, IRS officials said.

The extension period for individual and calendar-year corporate tax returns is also Oct. 15.

Virginia tax returns are not due until Nov. 1.

“Taxpayers who did not request an extension and have yet to file a 2019 tax return can generally avoid additional penalties and interest by filing the return as soon as possible and paying any taxes owed,” an agency spokesman said in an email.

With all things tax-related, filling out the proper forms is important.

“Make sure you sign the e-file authorizations, form 8879, and return them to your [accountant] as soon as possible,” said Jeff Ulmer, of Hantzmon Wiebel LLP, a Charlottesville-based accounting firm. “The tax returns can’t be transmitted to the IRS or Virginia until the [accountant] has those forms in their possession.”

“Plan ahead and get your information to your CPA as early as possible,” said Jim Hutcherson, of Hantzmon Wiebel. “Try to avoid being last-minute as the IRS e-file system can get over-loaded on the filing due date and has crashed in the past. Oct. 15 is similar to April 15 for CPAs, so be patient.”

Military personnel or Americans serving in combat zones get a break on the deadline. They have 180 days after leaving the combat zone to file returns and pay taxes. Some taxpayers in federally declared disaster areas who have valid extensions may also be exempt from the looming deadline.

The tax collecting agency recommends electronic filing options such as e-file or IRS Free File and paying taxes electronically rather than mailing a check. Officials said the online filing systems “reduce tax return errors as the tax software does the calculations, flags common errors and prompts taxpayers for missing information.”

Using the online software also assures the tax return will get to its destination in time, said Rich Busofsky, of Hantzmon Wiebel LLP.

“You have until midnight of the 15th to electronically file your return for the IRS to accept the filing as timely, whereas the post office closes at 5 p.m. on the 15th,” he said. “You have more flexibility if the return is electronically filed.”

Paying taxes by Oct. 15 will save penalties but filing by that date will save more. The IRS charges two different penalties for failure to file and failure to pay taxes, with a tougher penalty facing those who do not file on time.

“If the taxpayer has a balance due with the return and is unable to make full payment at this time, it is important to still file by Oct. 15, with or without payment,” said Busofsky. “The Tax authorities will bill you with interest and penalty for any monies owed. Do not withhold filing because you cannot make full payment now. The penalties are substantially greater for not filing by Oct 15.”

According to the IRS, if returns that were continued to Oct. 15 are not filed by the date, taxpayers could face a penalty of 5% of the tax owed for each month that the filing is late, up to a maximum of 25% of the tax owed.

If returns were filed but taxes were not paid, the taxpayer faces .5% of taxes owed for each month the taxes were not paid.

Reports from taxpayers across the country that tax payments made by check through the mail have not been credited are credible, the IRS admits. Officials noted that their offices were also temporarily closed due to COVID, creating a backlog.

Tax officials recommend not canceling payment on a check to the agency just because it has yet to be cashed.

“If a taxpayer mailed a check, either with or without a tax return, it may still be unopened in the backlog of mail the IRS is processing due to COVID-19,” officials wrote on the agency’s website. “Any payments will be posted as the date we received them rather than the date the agency processed them.”

Source: www.dailyprogress.com

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