As tax season rushes toward its conclusion, the caffeine intake increases around here. That’s what I will blame this week’s blog on, as this is kind of just a catch-all list of things to think about as we push toward April 17th.
First, yes, you read that right that the calendar benefits you by a couple days this year as a weekend and holiday have made April 17th the deadline for tax filing. At the same time, though, our calendar is already pretty packed, and although we do have some appointments left, the times can be sparse, so guaranteeing you can get something that will work for you is no longer possible.
That makes my second point one about extensions. This is something that many taxpayers use from time to time, and yes, it is pretty simple to get yourself an extra six months to file your taxes. This does not, however, mean that you get any extra time to pay your taxes. So if you are expecting a refund, there are no worries (but why didn’t you act earlier to get that money?), if you expect to owe taxes, however, you still want to get in a payment by the deadline.
If you are being affected by some of these issues, there may be a lesson to be learned about procrastination and how a little more initiative can remove some of the stress from this season. This is something that may even be more important than ever to learn before next year. With many new pieces of tax law coming into effect following the Tax Cuts and Jobs Act, it could serve everyone well to take the time to look at how their tax picture will be affected. The IRS is even urging everyone to do a checkup with its withholding calculator. That is a great place to start, but if you want more help or guidance, we will be very happy to set up tax planning appointments after tax season.
Finally, I mentioned in passing last week the steadily decreasing number of audits that the IRS is performing, and since that time news came out that the tally went down again last year, making it six years in a row of declines, and the lowest number of audits since 2002. Overall, only about 1 in 160 individuals, or 0.62 percent, had their 2016 returns audited. And sure, this can never really feel like bad news, but it can still be a little confusing.
I mean, high-income households saw a significant drop with only 4.37% of households with an income of $1 million or more being audited, down from 9.55% in 2015. This could reflect just how bad things are for the IRS – since those are the returns with more complications, more chances for error, and more potential for a higher return for the agency. At the same time, though, they can also be the returns with the most backing from professionals, and thus could take more effort from the already strapped IRS to combat.
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