Busy season is technically over, but CPAs and tax professionaks know all too well that some clients miss the tax-filing deadline. Here’s some advice on how to handle the dawdlers.
Clients Who Missed the April 18 Deadline
Granted, technical difficulties at the IRS did prevent taxpayers from filing on April 17. But those who still missed the April 18 deadline – and who owe taxes – should file ASAP and pay as much as possible because penalties add up quickly.
The failure-to-pay penalty typically is 5 percent of the unpaid tax amount for each month or part of a month that the return is late. For returns filed more than 60 days after the April due date – that would be after June 18 – clients will pay a minimum of either $210 or 100 percent of the unpaid tax, whichever is less.
Some late-filing clients may qualify for penalty relief and should include a letter begging forgiveness with their return. Or, they may qualify for penalty relief if they typically file and pay on time. That’s based on no assessed penalties for the last three years, among other requirements, according to the IRS’ first-time penalty abatement information.
The 'Where’s My Refund' People
Antsy clients can find their refund status in several places: The IRS offers its “Where’s My Refund?” tool, IRS2GO and by phone at 800-829-1954. Clients will have to provide the primary Social Security number on the return, filing status (single, married filing jointly and so on), and the expected refund amount. The tool updates once a day.
Do Clients Need to Change Their Withholding?
The tax-reform law has brought big changes, so it’s wise to have clients check their withholdings this year. The IRS recommends that all employees, including those with other income sources, check to ensure they don’t get hit with an unexpected year-end tax bill and possibly a penalty. The agency has revised its Withholding Calculator.
Clients Who Owe and Need to Make a Payment
They can view their balance; pay with IRSDirectPay, debit or credit cards; or apply online for a payment plan. To see their online account, though, clients will have verify their identity through the Secure Access.
Fixing Errors on Returns
Clients will likely check with CPAs first for any errors they discover on their returns. But amending a return usually isn’t necessary if clients made a math error or fail to attach a required form or schedule.
The IRS usually will correct the math and let the taxpayer know about that via mail, or send a letter asking for the missing paperwork. Taxpayers can use Should I File an Amended Return to figure out what they need to do.
Form 1040X, Amended U.S. Individual Income Tax Return, must be filed by paper and is available on IRS.gov/forms. If clients think they’ll get a refund from their original return, they should not file the amended return before the original is processed.
Clients can track the status of their amended returns at “Where’s My Amended Return?” Status updates typically are available beginning three weeks after the amended return is filed. Clients should allow up to 16 weeks for processing.
Terry Sheridan is an award-winning journalist who has covered real estate, mortgage finance, health care, insurance, personal finance, and accounting and taxation issues for newspapers, magazines, and websites. A Chicago native and former South Florida resident, she now lives in New England.