Have you filed your taxes yet? Millions of Americans have already filed and refunds have been flowing out of the US Treasury. As of March 9, IRS has processed more than 67 million returns and issued more than 55 million refunds. The average refund is $3,004, about the same as this time last year, but that number will fall as the season progresses.
Speaking of deadlines, the filing deadline this year is Tuesday, April 17 so you have a little over three weeks left to file. Taxpayers unable to file by the deadline may request a six-month extension using IRS form 4868. However, this is an extension of time to file, not an extension of time to pay, so running the numbers, accurately estimating tax liability and making a timely payment is part of the process. There are separate penalties for filing late and paying late so get as much done as you can to avoid incurring penalties and interest.
Another important April 17 deadline is the ability to claim a refund from tax year 2014. Taxpayers have three years to make a refund claim, so if you haven’t filed for a prior year and haven’t heard from the IRS, there’s a good chance they owe you money. According to a recent IRS news release, the Service says that unclaimed federal income tax refunds totaling $1.1 billion may be waiting for an estimated 1 million taxpayers who did not file a 2014 federal income tax return. This includes 69,800 Floridians who are missing out on more than $74 million in refunds. Clearly the time to file that old return is now!
As a reminder, tax time if also prime time for scammers so be careful with your personal information and choose your tax preparer wisely. IRS has compiled their annual top-12 list of the worst of the worst tax scams – their Dirty Dozen – and it once again includes unscrupulous tax return preparers and a variety of telephone scams.
Finally, with March Madness in full swing, good luck with your brackets and remember that gambling winnings are taxable. If you are lucky enough to have a winning bracket, don’t forget to share that news with Uncle Sam this time next year.
If this all sounds complicated, that’s because it is, and that’s why you need a tax professional in your corner - we keep up with all this stuff so you don’t have to.
To stay up-to-date on these and other changes follow us on Twitter (@TropicalTax). We are proud to be recognized by Forbes magazine as one of the 100 must-follow tax twitter accounts for 2018.
Jerry Gaddis is Founder & CEO of Tropical Tax Solutions, a full service firm headquartered in Key Largo offering Tax Consultation, Preparation and Representation services. Mr. Gaddis, a Dave Ramsey Endorsed Local Provider, is Enrolled to Practice Before the Internal Revenue Service and a Fellow in the National Tax Practice Institute. He earned degrees from the University of Florida and the Crummer Graduate School of Business at Rollins College in Winter Park, FL. He’s been in the tax business since 2004 and you can reach him at www.TropicalTax.com .