The Oct. 15 deadline for extension filers is almost here

If you requested an extension to file your 2019 tax return, the deadline is fast approaching.  The deadline is Thursday, October 15^th, 2020.  You do not have to wait until October 15^th to file.   Your return should be postmarked by the deadline date.

Filing electronically is the fastest way for taxpayers to get a refund.  If you choose to get your refund by direct deposit, that refund can be deposited in up to 3 accounts.  

If you owe taxes, pay as much as possible by the October 15^th deadline to reduce interest and penalties. 

If you are a military member in a combat zone or a contingency operation in support of the Armed Forces or if you are affected by a federally declared disaster, you may be allowed more time to file

Just Because You Got A Refund Doesn’t Mean You Didn’t Pay Any Federal Income Tax.

 

So how much federal income taxes did you actually pay?  

Just because you received a tax refund doesn’t mean that you paid no taxes.  It simply means that you overpaid your tax liability, which is the amount you owe the government, and the Internal Revenue Service has given you a refund of your overpayment.

So how do you determine what your tax liability actually was?  

If you filed a 1040 form in – 

Tax Year 2019 – look at line 16 “Total Tax”

Tax Year 2018 – look at line 15 “Total Tax”

Tax Year 2017 / 2016 – look at line 63 “Total Tax”

Your total tax liability could be further reduced by various credits which will reduce your liability, e.g. an earned income credit, portions of a child tax credit, or an education credit among others.  A credit is a dollar for dollar reduction of your tax liability. 

If you filed a different form – look for the line that says total tax, for example on the 2016 1040-EZ – see line 12.    

Some folks choose to use the IRS as their savings account, because they prefer to get a refund each year and that’s fine if that’s what you want to do, but if you are constantly overpaying your taxes, you may want to consider other ways to corral those funds rather than giving a loan to the federal government.  

 

Did your taxes?  Forgot something?  

Hmm, its the last thing you want to think about, but did you file all of your income when you submitted your tax return?  

One bit of income that folks often forget is a distribution from their retirement account.  If you took money out of your 401K during the tax year, you should have a 1099-R document sent to you by mail, or more likely its sitting in a recliner sipping a lemonade and waving at you from your broker's website or the website of the company that services your company's retirement funds, trying to get your attention.   

Go out to that website and see if there are 1099-R documents relaxing out there.  You may even find that there are forms for previous tax years that you didn't even have knowledge of.  If so, hello amendment.    You should have one also if you moved your retirement funds from one organization to another.  If you did the move directly or within 60 days, that will not create a taxable event, but you should keep track of that form.  

And yes those funds you took from your retirement account is considered income.  I know, you may have asked them to withhold taxes, but since they are unaware of your total income, what is withheld may actually not be enough, so just be aware.  

Yep, so you were about to log on to find out if any of those 1099-R's are awaiting your action... good luck.