Evan Vitale

Evan Vitale – Tax Deadline Looms

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By Evan Vitale

Many Americans enjoyed their Easter holiday weekend; returned from Spring Break vacations and/or sat down to do their civil duty and file their taxes.

The deadline is here.

Yes, we dread it, but it’s required.

Don’t worry too much…you still have a couple of days until your returns need to be postmarked by the United States Postal Service.

Although Saturday was April 15 – the day we usually recognize as “Tax Day” – deadlines would be normally pushed until Monday, April 17. However, that date is Emancipation Day in Washington D.C., so everything there is shut down. Bonus day!

You get another bonus day if you live in Maryland as Tuesday, April 18 is “Patriots Day.”

So, tax returns are due April 19 if you live in Maryland and April 18 if you live in any of the other 49 states.

If you need extra time, you can file an extension. However, an extension doesn’t delay your payment. Any taxes you owe are due on April 18.

Don’t delay. Get cracking!

Watch Those Tax Return Loan Fees!

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By Evan Vitale

Tax season is upon us and you’re probably in the same situation with others in that you’d like to get your taxes filed as quickly as possible and get your hands on your return.

However, what about those different businesses that help you prepare your taxes so they can offer you a “loan” on your return?

Unfortunately, even if you need the money right away, it might not be worth the price.

These are short-term loans – also called “instant refund loans” or “refund anticipation loans” – are popular as millions of Americans use the service year after year.

So, why are they a bad idea?

  • Large fees. Businesses offering tax services and short-term loans on your returns may also be charging you initial loan fees; tax preparation fees and electronic fees for filing your return. These fees might take a bite out of a larger return you were expecting.
  • Outrageous APR. In order to receive the loan on your return, you might have to pay an annual percentage rate of over 200%. Remember, this is just a short-term loan. Would you pay such a high rate for a car or home loan? Of course not!
  • Potential IRS problems. Remember the Internal Revenue Service? If there is any problem with your return, the IRS could throw a wrench into things and hold your refund. Even if that happens, you’re still responsible for paying off your short-term loan and now you’re stuck due to a return problem.

Some people may not have a choice and might be in a tough financial pinch and need the money from “loan on your return” businesses. If so, look for the best deal and the best interest rate. Do your homework, but remember: the best advice is to try to avoid getting a loan on your return altogether.

Evan Vitale – Getting Out Of Debt (Part II)

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By Evan Vitale

Let’s continue our series on how to get out of debt by focusing on a major stress point for many people and that is tax debt.

Depending on your situation, you might be past due on paying your federal taxes to the Internal Revenue Service (IRS); state taxes or county and local taxes. In all cases, ignoring tax reminders and past due notices, won’t make the matter go away. The longer you wait to solve the problem, the worse it will be, especially with mounting interest and penalties.

The best thing to do is to pay off – as soon as possible – any past due taxes you owe. Of course, that is easier said than done, especially if you are in a financial crunch. If that’s the case, you should contact the IRS (and any other agency you owe); explain your financial situation and offer to make payments. In most cases, all agencies will be willing to accept a payment plan. However, you should be aware that part of the payment terms is that you must remain current on payments and file and pay all future tax liabilities on time. If you are self-employed, you should be making quarterly payments on time.

In the case of federal taxes, the IRS has information on payment plans and installment agreements. You can read about them here:

https://www.irs.gov/individuals/payment-plans-installment-agreements

According to the IRS, “if you’re financially unable to pay your tax debt immediately, you can make monthly payments through an installment agreement. As long as you pay your tax debt in full, you can reduce or eliminate your payment of penalties or interest, and avoid the fee associated with setting up the agreement.”

Remember, always file your tax returns on time – even if you can’t pay the balance due in full. All tax returns must be filed in order to apply for any payment agreement.

In our next blog, we’ll review how to pay off credit card debt.

Evan Vitale – Getting Out Of Debt (Part I)

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By Evan Vitale

We all have some level of debt – a mortgage, a car payment, etc., but big-time debt could include past-due tax liabilities and a mound of credit card debt.

However, even if you feel like you are “drowning,” there are plenty of options and steps you can take to manage it better and get out of debt before you even consider bankruptcy.

First, let’s discuss past due tax debt. If you owe the Internal Revenue Service (or any state or local authority), this is something you should take care of right away. The IRS is more than willing to work with you on allowing for monthly payment arrangements (more on that in a future blog post).

The worst thing you can do (or not do) when it comes to ignoring your tax debt is to ignore it. Believe me, it’s not going away. Ignoring “past due” statements only increases your debt with additional interest and fees, but the correspondence will become more severe until you eventually face possible garnishment.

Do not ignore your tax debt.

When it comes to credit cards, the best thing you can do in order to handle this amount of debt is to stop using your credit cards. Just stop.

If you have multiple card cards, read your statements and figure out which card is charging you the most amount of interest and then focus on paying off the balance.

Another theory to handling credit card debt is to pay off the smallest debt first and move on to the next lowest card, etc. Some choose to pay each card each month and this is good, but you’ll need to may an effort in making sure your payment is larger than just the minimum due.

If you only pay the minimum amount due, it will take you a long time to pay off that credit card because of the interest charged.

Again, take a look at the interest each credit card is charging you and make proper payments accordingly.

In our next blog post, we’ll take a more in-depth look at how you can pay off your tax debt.

Evan Vitale – Did You Miss The Tax Deadline?

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By Evan Vitale

Now that we’ve passed the deadline – Monday, April 18, 2016 – for filing your federal, state and local tax returns, what should you do if you didn’t file or if you asked for an extension?

What are you waiting on?

Not filing your tax returns isn’t going to make the problem going away. The problem is still there and you certain don’t want the Internal Revenue Service to file your tax returns for you, nor do you want to get a letter in the mail from the IRS.

Some avoid filing tax returns because they know they are going to owe taxes and don’t have the financial ability to write a check at the same time. That’s OK. A lot of people owe taxes. You should still file your returns and get them in the mail ASAP. This way, you’ll have an exact amount that you owe and you can start working out a payment play with the IRS (yes, they will work with you on a payment plan that fits within your budget).

Filing an extension doesn’t delay the due date on the amount of taxes owed. Many people believe an extension means they don’t have to file tax forms nor do they have to pay until October 15. That is false. Filing for an extension means your forms are due by that date. The amount of tax you owe is still due on Monday, April 18, 2016.

By filing for an extension, you are still responsible for any non-filing penalties that have accrued to that date.

If you need help in getting your tax returns completed – even after the deadline AND even if you are not financially able to pay your taxes – you can visit one of many local tax filing offices that pop up all over the place this time of year or call an accountant to help you.

Don’t delay. Even though you missed the deadline, you are still required to get your returns completed and in the mail.

Evan Vitale – Filing Your Taxes FAQ

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By Evan Vitale

With tax day just around the corner, sometimes a few questions might come to mind if we’re surprised and find out that we owe taxes instead of receiving a refund. Here are some questions and answers to paying taxes and facing some unexpected financial responsibility.

What happens if I can’t pay my taxes this year?

You still want to sign and send in your tax return and pay as much as you can. The Internal Revenue Service (IRS) has payment options available, depending on how much you owe and your current financial situation. Each option has different requirements and some have fees.

What happens if I file late?

If you file your tax return late – with or without payment – the IRS will likely charge you a penalty. In addition, if you owe taxes, the IRS charges daily interest on unpaid tax bills. Therefore, the longer you wait to file or begin a payment plan, the more interest you will owe.

What happens if I don’t file my taxes?

This isn’t a good idea. The IRS will likely send you reminders to file. If ignored, the IRS may then file a substitute return on your behalf. Granted, while this may sound like a good idea in having the IRS file for you, you’ll probably not receive entitled deductions or credits.

If you are a chronic non-filer, you will be subject to additional penalties and, in some cases, criminal prosecution. Delinquent taxpayers who owe more than $25,000 will eventually receive a personal visit from an IRS agent to collect payment.

Remember:

  • Complete and file your federal, state and local (if required) tax returns on time to avoid penalties.
  • Even if you can’t afford to pay your tax obligations, it is better to file without payment than it is to wait until a later date. If you can, make some time of payment with your returns.
  • Never avoid or ignore filing your tax returns on time.

Evan Vitale – Final Tax Tips

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By Evan Vitale 

As we continue to get closer and closer to the deadline for filing local, county, state and federal tax returns, here are a few final tips for you to take into consideration:

– Remember, federal tax returns need to be filed by Monday, April 18, 2016. This gives you a few extra days than the normal April 15 deadline that you might be used to in previous years.

– Do not wait until the last minute to file. Inevitably, something will go wrong if you do. Your tax return software won’t work; you might have trouble downloading tax forms (because everyone else is doing it at the same time), etc. Plan to start as soon as possible.

– If you’re a small business owner, you should already have a handle on things and are in touch with your accountant/CPA in getting returns filed on time. Now would be a great time to get in touch with them to see if there’s anything else they need for you in order to assist them in getting everything completed on time and returned to you for your review and signatures.

– Make sure you have all of the necessary tax forms you need in order to file your returns on time. You can visit https://www.irs.gov to download federal forms. Note: The U.S. Post Office doesn’t offer tax return forms. You’ll also need to obtain any forms necessary so you can file your local, county and state returns. Again, don’t wait until the last minute as some of these forms may not be available for you to download online.

– Filing an extension does not extend the deadline for you to pay any taxes due. It only means you can file your federal return at a later day. Any taxes that are due need to be paid before or on April 18, 2016.

Good Luck!