Some
Timely Answers to Last-Minute Tax Questions
If you have some last-minute
questions about filing your tax return, you’re not alone. Hundreds of
taxpayers flock to IRS help lines at this time of year. But to alleviate some of
your tax-related anxiety, here are some common questions and answers.
My tax return won’t be
ready until April 15. What’s the best way to get it to the Internal Revenue
Service?
Use the U.S. Postal System. As
long as your return is postmarked on April 15, it will be deemed filed on time.
You also may use specifically designated delivery services, such as Federal
Express, Airborne Express, DHL Worldwide Express and United Parcel Service. You
also have the option of filing it electronically, but to do so you must have a
computer, modem and the right tax preparation software or hire a CPA who can
file it for you.
What documents should be included with my tax form?
Generally, the only forms that
need to be attached are W-2 and certain 1099 forms.
I found a mistake on one of my 1099 forms and
haven’t received a corrected one yet. What should I do?
You have two choices. Either
pay the amount of tax that is due and file for an extension or file your return
and send an amended return later with an explanation.
How
do I get an extension to file my tax return?
All you need to do is file
Form 4868 to obtain an automatic extension to August 15, 2000, eliminating
late-filing penalties. However, you’ll still need to pay any taxes you owe
with your request for an extension in order to avoid late payment penalties.
What if I can’t pay the balance of my taxes by
April 15?
If you can show undue
hardship, complete and mail Form 1127 on or before April 15 to extend the time
of payment for up to six months. Your application must be accompanied by
evidence supporting undue hardship, a statement of assets and liabilities, and
receipts and disbursements for three months prior to the original due date of
the return.
If you don’t think you’ll
be able to pay off your outstanding tax bill in full within six months, you can
file Form 9465 to request an installment agreement. However, you will be charged
a fee of $43, interest and late payment penalties on your outstanding tax
balance. As an alternative, you may want to consider getting a loan from a
family member, friend, or bank.
If the Internal Revenue Service finds that I made a
mistake and paid too little tax, will I be subject to any penalties?
That depends on the mistake.
You may have to pay an accuracy-related penalty if you underpaid your taxes
because of negligence or disregard of rules or regulations or because you
substantially understated your income. In the eyes of the IRS, the underpayment
is substantial if it is more than the larger of 10 percent of the tax required
to be shown on the return or $5,000. The accuracy-related penalty is equal to 20
percent of the underpayment.
If I overpaid my taxes in error, how can I get a
refund?
Simply file an amended return
and either request a refund or apply all or part of your overpayment on your
original return to your estimated taxes. If you choose to get a refund, it will
be mailed to you separately from any refund indicated on your original return.
How much time do I have to amend my return?
In general, you have three
years after the original timely return was due or filed, or two years from the
date the tax was paid, whichever is later. Generally, failure to file an amended
return within this time frame prevents you from receiving a tax refund, no
matter how valid your claim.
I’m getting back a big refund from the IRS this
year. What can I do to change that?
You need to complete a new W-4 Form and claim more
exemptions. Doing so will essentially result in less tax being withheld from
your paycheck. However, before doing that, make sure you consider whether
you’ll have any extra sources of income in 1999 that could boost your tax
liability. For example, if you anticipate some large mutual fund distributions
or dividends from stocks, you’ll owe taxes on those amounts in addition to the
taxes on your regular income.