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Taxpayers who can’t pay their taxes should still file on time


With the April tax filing due date just a few days away, taxpayers should remember to both file and pay any taxes they owe by the deadline. Taxpayers who do not file and pay timely will see their tax debt grow. In fact, penalties and interest can cause a taxpayer’s debt to grow by more than thirty percent in just a few months.

Here are some tips for taxpayers who owe tax, but who can’t immediately pay their tax bill. Taxpayers should:

File their tax return or request an extension of time to file by the April deadline. 

Taxpayers who owe tax and do not file their return on time or request an extension may face a failure-to-file penalty for not filing on time.

Pay as much as possible by the April due date. 

Whether they are filing a return or requesting an extension, taxpayers must pay their bill in full by the April filing deadline. Taxpayers who do not pay their taxes on time will face a failure-to-pay penalty. Taxpayers should remember that an extension of time to file is not an extension of time to pay.

Set up a payment plan as soon as possible. 

Taxpayers who owe, but cannot pay in full by the deadline don’tt have to wait for a tax bill to request a payment plan. Taxpayers can apply for a payment plan on IRS.gov. Taxpayers can also submit a payment plan request in writing using Form 9465, Installment Agreement Request.

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Tax Time Guide wrap-up

Tips on payment options, penalty waivers, refunds and more

WASHINGTON—The Internal Revenue Service urges taxpayers to file an accurate tax return on time, even if they owe but can’t pay in full. The IRS also recommends that taxpayers do a Paycheck Checkup early in 2019 to avoid having too much or too little tax withheld.

Most taxpayers are being affected by major tax law changes. While most will get a tax refund, others may find that they owe taxes. Those who owe may qualify for a waiver of the estimated tax penalty that normally applies. See Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts, and its instructions for details.

This news release is part of a series called the Tax Time Guide, a resource to help taxpayers file an accurate tax return. Additional help is available in Publication 17, Your Federal Income Tax, and the tax reform information page.

The filing deadline to submit 2018 tax returns is Monday, April 15, 2019, for most taxpayers. Because of the Patriot’s Day holiday on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17 to file their returns.

Checking on refunds

The IRS issues nine out of 10 refunds in less than 21 days. Using the “Where’s My Refund?” online tool, taxpayers can start checking on the status of their return within 24 hours after the IRS receives an e-filed return or four weeks after the taxpayer mailed a paper return. The tool has a tracker that displays progress through three phases: (1) Return Received; (2) Refund Approved; and (3) Refund Sent.

All that is needed to use “Where’s My Refund?” is the taxpayer’s Social Security number, tax filing status (such as single, married, head of household) and exact amount of the tax refund claimed on the return.

“Where’s My Refund?” is updated no more than once every 24 hours, usually overnight, so there’s no need to check the status more often.

Check withholding

The IRS encourages taxpayers to review their tax withholding using the IRS Withholding Calculator and make any needed adjustments early in 2019. Taxpayers should check their withholding each year and when life changes occur, such as marriage, childbirth, adoption or buying a home. Doing a Paycheck Checkup can help taxpayers avoid having too little or too much tax withheld from their paychecks. The IRS reminds taxpayers that they can generally control the size of their tax refund by adjusting their tax withholding.

For 2019, it’s important to review withholding and do a Paycheck Checkup. This is especially true for taxpayers who adjusted their withholding in 2018, specifically in the middle or later parts of the year. And it’s also important for taxpayers who received a tax bill when they filed this year or want to adjust the size of their tax refund for next year.

How to make a tax payment

Taxpayers should visit the “Pay tab” on IRS.gov to see their payment options. Most tax software products give taxpayers various payment options, including the option to withdraw the funds from a bank account. These include:

*IRS Direct Pay offers taxpayers a free, fast, secure and easy way to make an electronic payment from their bank account to the U.S. Treasury.

*Use an approved payment processor to pay by credit or debit card for a fee.

*Mail checks or money orders made out to the U.S. Treasury.

*Make monthly or quarterly tax payments using IRS Direct Pay or through the Electronic Federal Tax Payment System.

Can’t pay a tax bill?

Everyone should file their 2018 tax return by the tax-filing deadline regardless of whether they can pay in full. Taxpayers who can’t pay all their taxes have options including:

Online Payment Agreement: Individuals who owe $50,000 or less in combined income tax, penalties and interest and businesses that owe $25,000 or less in payroll tax and have filed all tax returns may qualify for an Online Payment Agreement. Most taxpayers qualify for this option and an agreement can usually be set up on IRS.gov in a matter of minutes.

Installment Agreement: Installment agreements are paid by direct deposit from a bank account or a payroll deduction.

Delaying Collection: If the IRS determines a taxpayer is unable to pay, it may delay collection until the taxpayer’s financial condition improves.

Offer in Compromise (OIC): Taxpayers who qualify enter into an agreement with the IRS that settles their tax liability for less than the full amount owed.

Taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at IRS.gov. They can use these resources to get help when it’s needed at home, at work or on the go.

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Things taxpayers should know about claiming dependents

As they are preparing their 2018 tax returns, taxpayers should remember that personal exemptions are suspended for 2018. Taxpayers cannot claim a personal exemption for anyone on their tax return. This means that an exemption can no longer be claimed for a tax filer, spouse or dependents.

Here are some quick key things for these taxpayers to know about claiming dependents on their 2018 tax return:

Claiming dependents 

A dependent is either a child or a qualifying relative who meets a set of tests. Taxpayers should remember to list the name and Social Security number for each dependent on their tax return.

Dependents cannot claim dependents. Taxpayers cannot claim any dependents if someone can claim the taxpayer or their spouse, if filing jointly, as a dependent.

Dependents may have to file a tax return. This depends on certain factors like total income, whether they’re married and if they owe certain taxes.

Child Tax Credit. Taxpayers may be able to claim this credit for each qualifying child under age 17 at the end of the year, if the taxpayer claimed that child as a dependent.

Credit for Other Dependents. Taxpayers may be able to claim this credit for qualifying relatives and children who don’t qualify for the Child Tax Credit.

Taxpayers can get answers to questions about claiming dependents, such as Whom May I Claim as a Dependent, by using the Interactive Tax Assistant tool at www.irs.gov.

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Earned income tax credit helps millions of Americans


All individual taxpayers and families should claim tax credits for which they are eligible. Tax credits cannot only reduce the amount of taxes owed, but some can result in a tax refund. The earned income tax credit is such a credit. It benefits millions of taxpayers by putting more money in their pockets.

The IRS encourages taxpayers who have claimed the credit to help their friends, family members and neighbors find out about EITC. They can go to IRS.gov/eitc or use the EITC Assistant tool on IRS.gov, available in English and Spanish. Word of mouth is a great way to help people who may be eligible for this credit in 2019 for the first time. People often become eligible for the credit when their family or financial situation changed in the last year.

Based on income, family size and filing status, the maximum amount of EITC for Tax Year 2018 is:

$6,431 with three or more qualifying children

$5,716 with two qualifying children

$3,461 with one qualifying child

$519 with no qualifying children

Every year, millions of taxpayers don’t claim the EITC because they don’t know they’re eligible. Here are some groups the IRS finds often overlook this valuable credit:

American Tribal communities

People living in rural areas

Working grandparents raising grandchildren

Taxpayers with disabilities

Parents of children with disabilities

Active duty military and/or veterans

Healthcare and Hospitality workers

Free tax help from volunteers:

The IRS works with community organizations around the country to offer free tax preparation services. They train volunteers who prepare taxes for people with low and moderate income. These volunteers can help determine if a taxpayer is eligible to claim the EITC. There are two IRS-sponsored programs:

Volunteer Income Tax Assistance: This program, also known as VITA, offers free tax return preparation to eligible taxpayers who generally earn $55,000 or less.

Tax Counseling for the Elderly: TCE is mainly for people age 60 or older but offers service to all taxpayers. The program focuses on tax issues unique to seniors. AARP participates in the TCE program through AARP Tax-Aide.

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All taxpayers will file using 2018 Form 1040


Forms 1040A and 1040EZ no longer available

As the April filing deadline approaches, IRS reminds taxpayers that Form 1040 has been redesigned for tax year 2018. The revised form consolidates Forms 1040, 1040A and 1040-EZ into one form that all individual taxpayers will use to file their 2018 federal income tax return.

Forms 1040-A and 1040-EZ are no longer available to file 2018 taxes. Taxpayers who used one of these forms in the past will now file Form 1040. Some forms and publications released in 2017 or early 2018 may still have references to Form 1040A or Form 1040EZ. Taxpayers should disregard these references and refer to the Form 1040 instructions for more information.

The new form uses a building block approach that can be supplemented with additional schedules as needed. Taxpayers with straightforward tax situations will only need to file the Form 1040 with no additional schedules.

People who use tax software will still follow the steps they’re familiar with from previous years. Since nearly 90 percent of taxpayers now use tax software, the IRS expects the change to Form 1040 and its schedules to be seamless for those who file electronically.

Electronic filers may not notice any changes because the tax return preparation software will automatically use their answers to the tax questions to complete the Form 1040 and any needed schedules.

For taxpayers who filed paper returns in the past and are concerned about these changes, this year may be the year to consider the benefits of filing electronically. Using tax software is a convenient, safe and secure way to prepare and e-file an accurate tax return.

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IRS Dirty Dozen list of tax scams for 2019

Agency encourages taxpayers to remain vigilant year-round

The Internal Revenue Service wrapped up issuing its annual “Dirty Dozen” list of tax scams this week. The IRS reminds taxpayers to remain vigilant to these often aggressive and evolving schemes throughout the year.

This year’s Dirty Dozen list highlights a wide variety of schemes that taxpayers may encounter at any time, although many may peak during tax-filing season. The schemes run the gamut from simple refund inflation scams to complex tax shelter deals. A common theme throughout all: scams put taxpayers at risk.

Taxpayers are encouraged to review the list in a special section on IRS.gov and be on the lookout for these ruses throughout the year.

Taxpayers should remember that they are legally responsible for what is on their tax return even if it is prepared by someone else. Consumers can help protect themselves by choosing a reputable tax preparer. For more, see the Choosing a Tax Professional page.

Here is a recap of this year’s Dirty Dozen scams:

Phishing: Taxpayers should be alert to potential fake emails or websites looking to steal personal information. The IRS will never initiate contact with taxpayers via email about a bill or tax refund. Don’t click on one claiming to be from the IRS. Be wary of emails and websites that may be nothing more than scams to steal personal information. (IR-2019-26)

Phone Scams: Phone calls from criminals impersonating IRS agents remain an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent years as con artists threaten taxpayers with police arrest, deportation and license revocation, among other things. (IR-2019-28)

Identity Theft: Taxpayers should be alert to tactics aimed at stealing their identities, not just during the tax filing season, but all year long. The IRS, working in conjunction with the Security Summit partnership of state tax agencies and the tax industry, has made major improvements in detecting tax return related identity theft during the last several years. But the agency reminds taxpayers that they can help in preventing this crime. The IRS continues to aggressively pursue criminals that file fraudulent tax returns using someone else’s Social Security number. (IR-2019-30)

Return Preparer Fraud: Be on the lookout for unscrupulous return preparers. The vast majority of tax professionals provide honest, high-quality service. There are some dishonest preparers who operate each filing season to scam clients, perpetuate refund fraud, identity theft and other scams that hurt taxpayers. (IR-2019-32)

Inflated Refund Claims: Taxpayers should take note of anyone promising inflated tax refunds. Those preparers who ask clients to sign a blank return, promise a big refund before looking at taxpayer records or charge fees based on a percentage of the refund are probably up to no good. To find victims, fraudsters may use flyers, phony storefronts or word of mouth via community groups where trust is high. (IR-2019-33)

Falsifying Income to Claim Credits: Con artists may convince unsuspecting taxpayers to invent income to erroneously qualify for tax credits, such as the Earned Income Tax Credit. Taxpayers should file the most accurate tax return possible because they are legally responsible for what is on their return. This scam can lead to taxpayers facing large bills to pay back taxes, interest and penalties. (IR-2019-35)

Falsely Padding Deductions on Returns: Taxpayers should avoid the temptation to falsely inflate deductions or expenses on their tax returns to pay less than what they owe or potentially receive larger refunds. Think twice before overstating deductions, such as charitable contributions and business expenses, or improperly claiming credits, such as the Earned Income Tax Credit or Child Tax Credit. (IR-2019-36)

Fake Charities: Groups masquerading as charitable organizations solicit donations from unsuspecting contributors. Be wary of charities with names similar to familiar or nationally-known organizations. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate charities. IRS.gov has the tools taxpayers need to check out the status of charitable organizations. (IR-2019-39)

Excessive Claims for Business Credits: Avoid improperly claiming the fuel tax credit, a tax benefit generally not available to most taxpayers. The credit is usually limited to off-highway business use, including use in farming. Taxpayers should also avoid misuse of the research credit. Improper claims often involve failures to participate in or substantiate qualified research activities or satisfy the requirements related to qualified research expenses. (IR-2019-42)

Offshore Tax Avoidance: Successful enforcement actions against offshore cheating show it’s a bad bet to hide money and income offshore. People involved in offshore tax avoidance are best served by coming in voluntarily and getting caught up on their tax-filing responsibilities. (IR-2019-43)

Frivolous Tax Arguments: Frivolous tax arguments may be used to avoid paying tax. Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims about the legality of paying taxes despite being repeatedly thrown out in court. The penalty for filing a frivolous tax return is $5,000. (IR-2019-45)

Abusive Tax Shelters: Abusive tax structures including trusts and syndicated conservation easements are sometimes used to avoid paying taxes. The IRS is committed to stopping complex tax avoidance schemes and the people who create and sell them. The vast majority of taxpayers pay their fair share, and everyone should be on the lookout for people peddling tax shelters that sound too good to be true. When in doubt, taxpayers should seek an independent opinion regarding complex products they are offered. (IR-2019-47)


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4 tax tips for online filers in 2019

(BPT) – As time continues to tick, millions of tax filers are beginning to feel the pressure to file a tax return. But big questions still remain, and for those filing online, those questions are compounded by the myriad options for submitting a return.

Fortunately for those online filers, there is such a thing as sound advice. With help from some of America’s renowned tax experts, we’ve compiled a list of the top four tips for filing online in 2019.

1. Organization is important – especially if you’re filing online 

Organizing necessary documents is one of the most important steps to make tax preparation smoother. Start with gathering last year’s tax return. Online filers will need information from this document. From there, secure income documents, receipts, etc. Checking the documents against a checklist can help taxpayers be sure they’ve got everything they need. Missing tax documents can mean missing out on entitled tax benefits. Taxpayers can find ready-to-use checklists or customize their own online, at places like hrblock.com/checklist.

2. Digitize documents

Taxpayers can avoid the paper chase of finding tax and financial documents by downloading online copies whenever possible or snapping pictures of hard copies. These files can then be placed in an online storage tool like MyBlock.

3. Life is FULL of distractions, so limit yours when filing a return 

A recent survey from H&R Block asked consumers what sort of things they do when filing their taxes, and the answers were interesting. People browse social media, watch TV, cook dinner, yell at their kids, and so on. More distractions can mean a higher likelihood of mistakes or missed credits and deductions. Limit those distractions and focus on the task at hand.

4. Take advantage of help options

Fortunately, taxpayers don’t have to make a choice between doing their taxes themselves or completely turning over the preparation to a tax professional. Before committing to any specific online tax filing product, taxpayers should be sure to investigate what assistance options are available in case they get stuck or have concerns. Most online tax filing products offer some sort of assistance, whether it’s going to an in-product help center or even having a tax pro review their completed return before it is submitted to the IRS.

Taxpayers looking for a middle ground may want to select something like H&R Block’s new Ask a Tax Pro service that gives them unlimited, on-demand chat sessions with a tax expert, so they can get the help they need as they are working on their tax returns.

“This tax season may be a time when even the most confident do-it-yourself filer could use a little help along the way,” said Heather Watts, senior vice president and general manager of digital at H&R Block. “Taxpayers filing online have more support options that let them decide how much or how little help they want with their tax preparation.”

Filing taxes isn’t optional for most Americans, but following these four tips can help make the do-it-yourself path a lot smoother. For a full lineup of online and software tax filing products and to get started, visit hrblock.com.

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Business taxpayers should take another look at their estimated tax payments

Taxpayers who pay quarterly estimated tax payments may want to revisit the amount they pay. The Tax Cuts and Jobs Act changed the way most taxpayers calculate their tax. These taxpayers include those with substantial income not subject to withholding, such as small business owners and self-employed individuals. The tax reform changes include:

• Revised tax rates and brackets

• New and revised business deductions

• Limiting or discontinuing deductions

• Increasing the standard deduction

• Removing personal exemptions

• Increasing the child tax credit

As a result of these changes, many taxpayers may need to raise or lower the amount of tax they pay each quarter through estimated taxes.

Alternatively, many taxpayers who receive income not subject to withholding, but who also receive income as an employee, may be able to avoid the requirement to make estimated tax payments by having more tax taken out of their pay. These taxpayers can use the Withholding Calculator on IRS.gov to perform a Paycheck Checkup. Doing so now will help avoid an unexpected year-end tax bill and possibly a penalty in the future. 

Taxpayers with more complex situations might need to use Publication 505, Tax Withholding and Estimated Tax, instead.  This includes people who owe self-employment tax, the alternative minimum tax, or tax on unearned income from dependents, and people with capital gains or dividends.

Form 1040-ES can also help taxpayers figure these payments simply and accurately. The estimated tax package includes a quick rundown of key tax changes, income tax rate schedules for 2019 and a useful worksheet for figuring the right amount of tax to pay.

Estimated tax penalty relief

The IRS is waiving the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year. This relief is designed to help taxpayers who were unable to properly adjust their withholding and estimated tax payments to reflect an array of changes under TCJA.

The IRS will generally waive the penalty for any taxpayer who paid at least 85 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two. The usual percentage threshold is 90 percent to avoid a penalty. For more information about the penalty and requesting the waiver, see Form 2210 and its instructions.

Separately, farmers and fishermen qualify for a waiver if they file their 2018 tax return and pay all taxes due by April 15, 2019; April 17 for residents of Maine and Massachusetts. The usual deadline is March 1.

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Taxpayers should be ready to verify their identity when calling the IRS

Taxpayers and tax professionals who call the IRS will be asked to verify their identities. Being prepared before a call or visit can save taxpayers time by avoiding having to make multiple calls.

Before calling, taxpayers and tax professionals should instead consider using IRS.gov to access resources like the IRS Service Guide to get faster answers to their tax questions.

If a taxpayer decides to call, they should know that IRS phone assistors take great care to only discuss personal information with the taxpayer or someone the taxpayer authorizes to speak on their behalf. To make sure that taxpayers do not have to call back, the IRS reminds taxpayers to have the following information ready:

*Social Security numbers and birth dates for those who were named on the tax return.

*An Individual Taxpayer Identification Number letter if the taxpayer has one instead of an SSN.

*Their filing status: single, head of household, married filing joint or married filing separate.

*The prior-year tax return. Telephone assistors may need to verify taxpayer identity with information from the return before answering certain questions.

*A copy of the tax return in question.

*Any IRS letters or notices received by the taxpayer.

By law, IRS telephone assistors will only speak with the taxpayer or to the taxpayer’s legally designated representative.

If taxpayers or tax professionals are calling about someone else’s account, they should be prepared to verify their identities and provide information about the person they are representing. Before calling about a third-party, they should have the following information available:

*Verbal or written authorization from the third-party to discuss the account.

*The ability to verify the taxpayer’s name, SSN or ITIN, tax period, and tax forms filed.

*Preparer Tax Identification Number or PIN if a third-party designee.

One of these forms, which is current, completed and signed:

*Form 8821, Tax Information Authorization

*Form 2848, Power of Attorney and Declaration of Representative

Questions regarding a deceased taxpayer require different steps. The caller should be prepared to fax:

*The deceased taxpayer’s death certificate.

*Either copies of Letters Testamentary approved by the court, or IRS Form 56, Notice Concerning Fiduciary Relationship.

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Tax Time Guide

Most people affected by major tax reform changes 

WASHINGTON—With major tax law changes impacting every taxpayer, the Internal Revenue Service has developed a special electronic publication and other online resources designed to help people understand how tax reform affects them this year and the years ahead.

This news release is part of a series called the Tax Time Guide, a resource to help taxpayers file an accurate tax return. Additional help is available in Publication 17, Your Federal Income Tax, and the tax reform information page.

Last fall, the IRS released an online publication, called Tax Reform: Basics for Individuals and Families. Available at IRS.gov/getready, Publication 5307 provides an overview of these and other key changes affecting tax returns:

Tax rates lowered. Starting in 2018, there are seven income tax brackets, ranging from 10 percent to 37 percent.

Standard deduction nearly doubled over last year. For 2018, the basic standard deduction is $12,000 for singles, $18,000 for heads of household and $24,000 for married couples filing a joint tax return. Higher amounts apply to people who are blind or filers who are at least age 65. The increased standard deduction, coupled with other changes, mean that more than half of those who itemized their deductions for mortgage interest, charitable contributions and state and local taxes in tax year 2017 may instead take the higher standard deduction in 2018, according to IRS projections.

Various deductions limited or discontinued. For example, the state and local tax deduction is limited to $10,000, $5,000 if married and filing a separate return, and new limits apply to mortgage interest. In addition, the miscellaneous itemized deduction for job-related costs and certain other expenses is not available.

Child Tax Credit doubled, and more people now qualify. The maximum credit is now $2,000 for each qualifying child under age 17. In addition, the income limit for getting the full credit is $400,000 for joint filers and $200,000 for other taxpayers.

New credit for other dependents. A $500 credit is available for each dependent who does not qualify for the Child Tax Credit. This includes older children and qualifying relatives, such as a parent.

Personal and dependency exemptions suspended. This means that an exemption can no longer be claimed for a tax filer, spouse and dependents.

Another helpful resource is the newly-revised edition of Publication 17, Your Federal Income Tax, the agency’s s comprehensive tax guide for individual taxpayers. Besides providing further details on each of these changes, this publication is also packed with tax-filing information and tips on a wide variety of topics, ranging from what income needs to be reported and how to report it, to claiming dependents and using IRAs to save for retirement.

Publications 17 and 5307 are just two of many helpful resources available at no charge on IRS.gov. Among other things, people can find answers to their tax questions and ways to resolve tax issues online. The Let Us Help You page helps answer most questions, and the IRS Services Guide links to these and other IRS services. The IRS TaxMap can also be used to find answers to tax questions. IRS.gov/TaxMap searches Publication 17 and all other publications, instructions, and web pages on IRS.gov for content on the searched topic.

Taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at IRS.gov. They can use these resources to get help when needed from the convenience of home or office.

More resources: FS-2019-2; Be Tax Ready—understanding tax reform changes affecting individuals and families.

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