Tax deadlines for 2010 tax returns

Torrance tax deadlines

Traditionally, the tax deadline for filing your federal tax returns is on April 15th of every year, but this year, Tax Day 2011 falls a few days later on April 18th which the IRS has approved as the new deadline for filing your 2010 taxes. Refrain from thinking that you can postpone filing your taxes by a few days, however. This new tax deadline appears to applicable only for federal taxes. Your state tax are still due on April 15th. And if you live overseas, your due date is still April 15th as well.

 

Why did the tax deadline in 2011 change?

National Tax Day has always fallen on April 15th unless that day happens to be a weekend or federally recognized holiday. But this year, Tax Day falls on a Friday, so what's the deal? Well, in 2011, Washington D.C. decided to celebrate Emancipation Day a day early on April 15th, which marks the day President Lincoln signed the Emancipation Act freeing more than 3,000 slaves. Since the residents of D.C. were the "first freed" by the federal government, it was decided to make it an official public holiday, which pushes back National Tax Day by one business day to Monday, April 18th.

 

Need tax help?

If you need a tax accountant who offers tax preparation services in Torrance, please call 1-310-894-9244 or email Mike at Mike@wkacctax.com for more information.

IRS Announcement

IRS just announced that they are not ready to accept some of the tax returns. This does not mean that you can not prepare your tax return. A South Bay accountant can prepare your tax and file it with IRS as soon as they accept the returns. Please read the announcement and call me if you have any question.

The Internal Revenue Service today opened the 2011 tax filing season by announcing that taxpayers have until April 18 to file their tax returns. The IRS reminded taxpayers impacted by recent tax law changes that using e-file is the best way to ensure accurate tax returns and get faster refunds.

Taxpayers will have until Monday, April 18 to file their 2010 tax returns and pay any tax due because Emancipation Day, a holiday observed in the District of Columbia, falls this year on Friday, April 15. By law, District of Columbia holidays impact tax deadlines in the same way that federal holidays do; therefore, all taxpayers will have three extra days to file this year. Taxpayers requesting an extension will have until Oct. 17 to file their 2010 tax returns.

The IRS expects to receive more than 140 million individual tax returns this year, with most of those being filed by the April 18 deadline.

The IRS also cautioned taxpayers with foreign accounts to properly report income from these accounts and file the appropriate forms on time to avoid stiff penalties.

Who Must to Wait to File
For most taxpayers, the 2011 tax filing season starts on schedule. However, tax law changes enacted by Congress and signed by President Obama in December mean some people need to wait until mid- to late February to file their tax returns in order to give the IRS time to reprogram its processing systems.

Some taxpayers – including those who itemize deductions on Form 1040 Schedule A – will need to wait to file. This includes taxpayers impacted by any of three tax provisions that expired at the end of 2009 and were renewed by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act Of 2010 enacted Dec. 17. Those who need to wait to file include:

• Taxpayers Claiming Itemized Deductions on Schedule A. Itemized deductions include mortgage interest, charitable deductions, medical and dental expenses as well as state and local taxes. In addition, itemized deductions include the state and local general sales tax deduction that was also extended and which primarily benefits people living in areas without state and local income taxes. Because of late Congressional action to enact tax law changes, anyone who itemizes and files a Schedule A will need to wait to file until mid- to late February.

• Taxpayers Claiming the Higher Education Tuition and Fees Deduction. This deduction for parents and students – covering up to $4,000 of tuition and fees paid to a post-secondary institution – is claimed on Form 8917. However, the IRS emphasized that there will be no delays for millions of parents and students who claim other education credits, including the American Opportunity Tax Credit extended last month and the Lifetime Learning Credit.

• Taxpayers Claiming the Educator Expense Deduction. This deduction is for kindergarten through grade 12 educators with out-of-pocket classroom expenses of up to $250. The educator expense deduction is claimed on Form 1040, Line 23 and Form 1040A, Line 16.

For tax preparation Torrance-based services, call 310-894-9244 to schedule a free 30 minute consultation.

How does the IRS calculate tax penalties?

If you owe taxes, the Internal Revenue Service will calculate penalties and interest on the amount owed. If you have a refund, the IRS may pay you interest on the delayed refund. (Note the difference between "will" and "may" – the IRS generally pays interest on refunds that have been delayed because of slow processing by the IRS. Since most late tax returns take longer to process, the IRS "may" pay you interest on based on the extra amount of time it takes them to process your return.) If you have a refund, there is no penalty for filing late. Penalties are calculated on the amount due. Since there is no amount due, there is no penalty.

If you have a balance due on a late tax return, the IRS will calculate additional penalties and interest. There are three separate penalties:

·         Failure to File Penalty

·         Failure to Pay Penalty

·         Interest

Each is calculated differently. Let's take a look at each one.

Failure to File Penalty

The failure-to-file penalty is calculated based on the time from the deadline of your tax return (including extensions) to the date you actually filed your tax return. The penalty is 5% for each month the tax return is late, up to a total maximum penalty of 25%. The percentage is of the tax due as shown on the tax return. If your tax return is more than five months late, simply multiply your balance due by 25% to calculate your failure to file penalty.

Failure to Pay Penalty

The failure-to-pay penalty is calculated based on the amount of tax you owe. The penalty is 0.5% for each month the tax is not paid in full. There is no maximum limit to the failure-to-pay penalty. The penalty is calculated from the original payment deadline (the original April 15th filing deadline) until the balance due is paid in full.

Interest

Interest is calculated based on how much tax you owe. Interest rates change every three months. Currently, the IRS interest rate for underpayment of tax is 4% per year. The interest is calculated for each day your balance due is not paid in full.

For more help calculating potential tax penalties and other tax related services, contact WK Accounting and Tax Services at 310-894-9244.