Every year there are plenty of taxpayers who file a return with the IRS and then need to change it. The only way to do this is to prepare and submit an amended return, Form 1040X [Amended U.S. Individual Income Tax Return], to the IRS. Once filed, Form 1040X will become your new tax return, changing the information submitted in the original.
There are several reasons to amend a return:
- Your personal information was incorrect – This can include your name, social security number, or filing status. The latter is particularly important, as it can affect various thresholds that have a large impact on your tax due/refund.
- You received a new tax form – If you received a new tax form after you filed your return, you will need to file an amended return, especially if that form was a W-2 or 1099. Employers use these forms to report income to you and the IRS. The IRS knows you made this money and will hold you accountable for back taxes (not to mention penalties and interest) if you don’t report it. Continue reading
Nas’s new album may be titled Life Is Good, but that hardly describes the state of the Queensbridge rapper’s financial affairs. Turns out the man behind Illmatic owes the IRS a whopping $6 million in back taxes.
In fact, the IRS has already started garnishing his wages. When you’re an artist, that means the money your fans spend on your music – if they even bother to spend money – goes straight to the IRS. Technically, his wages are being garnished through the music publishing organizations BMI and ASCAP. As taxpayers, let’s hope Nas doesn’t have a lot of libertarian fans.
Lucky for him, Life Is Good is looking like one of the most anticipated rap albums of the year after his latest single “The Don” – a case of art imitating life, perhaps? – dropped earlier this month.
Nas is no stranger to tax trouble. Last year, Rolling Stone reported that he owed the IRS $6.4 million in back taxes. The agency filed a $514,298 tax lien in January 2011, a $3 million lien in February 2010, and a $2.5 million lien in October 2009. Plus he hadn’t paid his condo fees in almost a year and was struggling to make the $5,000 a month child support payments and $20,000 a month spousal support payments he owes ex-wife Kelis, whose milkshake may bring the boys to the yard, but has considerably less success with alimony checks. Continue reading
The dark back tax cloud got a bit of a silver lining earlier this month when the IRS announced it was expanding its ‘Fresh Start’ initiative to alleviate the back tax burden on unemployed and self-employed taxpayers who have been hit hard by the sluggish economy.
The agency is reducing failure-to-pay penalties for these taxpayers as well as doubling the back tax debt threshold that allows taxpayers to qualify easily for an installment plan of repayment.
The changes, however, will affect only two narrow groups of taxpayers:
- Wage earners who were unemployed for at least thirty consecutive days during 2011 or the 2012 tax season, and
- Self-employed individuals whose business income suffered at least a 25% decrease in 2011. Continue reading
Posted in Tax News
We here at LateTax have already written about all the reasons for filing late income taxes if you are due a refund. (You could get money back! With no penalties!) But what happens if you are filing a late tax return and you aren’t expecting a refund? Should you still file?
The answer is yes. Alas, the picture is not so rosy for you as it is for those late filers who will be rewarded with a nice chunk of change for their belated effort. The best you can hope for is limiting the amount you owe in penalties and interest. That’s right, if you owe money, there are penalties for filing and paying federal taxes late.
First, let’s break down the different types of late tax penalties. This nastiest of the IRS penalties is a failure-to-file penalty which occurs – you guessed it – when you fail to file a return at all. This penalty amounts to 5% of whatever you owe for each month the return is late, up to a maximum penalty of 25%. Continue reading
There are a number of good reasons you should late file your federal taxes, whether you foresee missing this year’s deadline or omitted to file your taxes from previous years.
Foremost, you could be due a refund, in which case you would get money without any penalties. But even if you owe the IRS money, you could limit the amount of the penalties for filing late. Either way, it’s wise to file.
So, how do you go about filing late? At Latetax.com, we can help you do just that, and to get you started we first outline a few important things you need to pay attention to.
First, plan ahead. We advise that you start thinking about the tax process well before the April deadline. The sooner you grasp your present tax situation, the sooner you can take the necessary steps to deal with it. Continue reading
Okay, so you missed the deadline to file taxes. Now you’re wondering why you should even bother with a late filing of federal taxes. If the IRS isn’t on your case about it by now, why put yourself through all the hassle?
The fact of the matter is that there are a ton of good reasons to get started on filing late tax returns. First of all, even if your return is late, the news may not be all bad. If you’re due a refund for withholding or estimated taxes paid, you could still get your money. The only way to claim the refund you’re entitled to is to file a late tax return.
“Is it too late to file my taxes?” you may be asking. Or, more specifically, “How late can I file taxes and still get my refund?” If you are due a refund, you have to claim it within 3 years or else you risk forfeiting it completely. The same goes for tax credits such as the Earned Income Credit (EIC). This means that you’ve got 3 years to file a late return and still get your refund. So if you haven’t filed your 2010, 2009, or 2008 taxes, you’ve still got time to file and get money back. The next deadline is April 15, 2012. If you fail to file 2008 taxes by then, you can say goodbye to any refund. The deadline for claiming a refund with a late return for 2009 is April 15, 2013, and so on. Continue reading
Obviously, submitting an extension is the best case scenario when it comes to filing federal income tax late, but if the April tax deadline took you by surprise, or you haven’t filed a return from several years ago, then you will just have to incur penalties and go about late tax filing.
Generally, you are responsible for filing late tax returns for the past year as well as the previous six if any of those are un-filed as well, though the IRS could always ask for even older returns. You file a late tax return just as you would a normal tax return. The only major difference is that the deadline for filing online is six months after the original due date, when everyone who applied for an extension is required to file. If your tax return is later than this you’ll have to file the old-fashioned way, with a physical paper copy of your return. Continue reading