This major tax deadline is today. What you need to know

FatCamera | E+ | Getty ImagesIf you asked the IRS for six more months to work on your 2018 tax return, you’re about to run out of time. This spring, about 15 million taxpayers asked the IRS for an extension on their 2018 tax return. Procrastinators take heed: If you miss this deadline, you’re on the hook for a 5% failure to file penalty. For instance, the state and local tax deduction is now capped at $10,000. More than 15 million taxpayers took this deduction on their 2018 tax return as of July


FatCamera | E+ | Getty ImagesIf you asked the IRS for six more months to work on your 2018 tax return, you’re about to run out of time. This spring, about 15 million taxpayers asked the IRS for an extension on their 2018 tax return. Procrastinators take heed: If you miss this deadline, you’re on the hook for a 5% failure to file penalty. For instance, the state and local tax deduction is now capped at $10,000. More than 15 million taxpayers took this deduction on their 2018 tax return as of July
This major tax deadline is today. What you need to know Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-15  Authors: darla mercado
Keywords: news, cnbc, companies, today, filers, know, extension, taxpayers, major, return, 2018, need, youre, tax, deduction, deadline, irs


This major tax deadline is today. What you need to know

FatCamera | E+ | Getty Images

If you asked the IRS for six more months to work on your 2018 tax return, you’re about to run out of time. This spring, about 15 million taxpayers asked the IRS for an extension on their 2018 tax return. While those filers had to pay their projected taxes by April 15, they had to until Oct. 15 to complete and submit their returns. Procrastinators take heed: If you miss this deadline, you’re on the hook for a 5% failure to file penalty. Even with the extra time, accountants are still contending with last-minute filers and additional complexity from the Tax Cuts and Jobs Act, which went into effect in 2018.

“We are getting through extension season — a nightmare,” said Dan Herron, CPA and principal of Elemental Wealth Advisors in San Luis Obispo, California. “We have a long way to go in terms of understanding tax reform.” Changes stemming from the new tax code include the elimination of personal exemptions and the near-doubling of the standard deduction. Certain itemized deductions are now subject to new limitations, as well. For instance, the state and local tax deduction is now capped at $10,000. Here’s what taxpayers should know if they’re about to hit that extension deadline.

A new tax break

UberImages | iStock | Getty Images

There are several reasons why filers sought more time. For instance, investors in partnerships awaited Schedule K-1 forms from those businesses. These documents spell out the investor’s share of income from the partnership, and they often don’t arrive until late spring. In addition, small-business owners — including the people who owned those partnerships — were trying to determine whether they qualified for the new 20% qualified business income deduction. More than 15 million taxpayers took this deduction on their 2018 tax return as of July 25, the IRS found. The rules around the so-called QBI deduction were still in flux for most of 2018 and part of 2019. This was a case where it was better to wait for certainty, accountants said. “While we have an idea on a client’s situation as to whether they’re a trade or business, we were waiting until later for additional guidance,” said Chris Hesse, CPA and chair of the American Institute of CPAs’ tax executive committee. “We think your risk goes down if we wait as long as possible to file,” he said.

Next year’s blueprint


Company: cnbc, Activity: cnbc, Date: 2019-10-15  Authors: darla mercado
Keywords: news, cnbc, companies, today, filers, know, extension, taxpayers, major, return, 2018, need, youre, tax, deduction, deadline, irs


Home Forums

    • Forum
    • Topics
    • Posts
    • Last Post

Leave a Reply

Your email address will not be published. Required fields are marked *