Last-Minute Tax Tips for Extension Filers

Posted by Brooke Sullivan on Thursday, October 13th, 2016 at 10:53am

The extended deadline for filing taxes this year is October 17.*


MarketWatch has provided tips for last-minute filers, see the top tips below:

  • ·        Don’t wait until the very last minute to file online. Imagine if your software stops working, or you have internet issues – you could end up missing the deadline all together.
  • ·        Planning to file on paper? Check local U.S. Post Offices for which branches will be post-marking mail up until midnight. Doing this in advance will show you exactly where to go and be sure to show up at least a half hour before they close.
  • ·        Even if you don’t have all that you need to file a complete return, submit it anyway. You will get hit with a 5% per month late filing penalty if you miss the deadline this October 17. Filing something will get you no late filing fee.
  • ·        But at the same time… Don’t file a frivolous return just to get something in. Include a Form 8275 Disclosure Statement and attach your explanations. Make reasonable estimates of the missing income, expense or tax basis of assets sold. Make written notes about how those estimates were made and include them. This will reduce your potential audit risk to three years, rather than six, in case your estimates were wrong.
  • ·        When you get any correct information later, file an amended return with the right amounts. After you file an original return, you have up to three years to file an amended version.
  • ·        If you are planning on working with a tax professional, expect to pay huge rush fees or expect to be filing late. After all, while you might get away with filing a quick return, they must do a diligent job.
  • ·        Make payments with your tax return using the IRS’s Direct Pay tool. It is a free service that draws the money directly from your account, giving you proof that the IRS received your payment and showing how it was applied.
  • ·        Worried that you will owe a lot? File anyway. You will have to pay your taxes sooner or later and it is much easier to take care of them now than getting stuck with 25% worth of late filing penalties.
  • ·        Whatever you end up filing, keep a printed or PDF copy of all of your tax returns, forms, notes, 1099s, W-2s, etc. Any and all documents that went into producing the information reported on your tax return. Make copies of all payments, including printing out online payments for your records.

*The people who live in areas in the U.S. where disasters hit will have extra time to file as long as they have already put their personal tax returns on extension. With Hurricane Matthew still making its way through the eastern part of the U.S., the IRS will announce details of these special extensions soon.


Benefits of Nevada Residency, Q&A by George Ashley of Ashley Quinn, CPAs and Consultants:

What may be the income tax advantages of establishing and maintaining residency in the state of Nevada?
Nevada is one of only a handful of states which do not impose an income tax upon individuals or businesses. Nevada residents may generally avoid state income taxes on many types of income which are not sourced to other states. Nevada also has no inheritance or estate taxes.

Who can most benefit from establishing Nevada residency?
Individuals who expect to earn significant income from intangible assets. This includes interest income and dividends, gains on the sale of publically-held and closely-held securities, and income from retirement benefits, including IRAs.

What are the requirements for Nevada Residency?
Generally the legal residence of a person is in Nevada if the person has been physically present within the State during the period for which residency is claimed. Legal residence starts on the day that such actual physical presence begins. The more important question, however, is how does a person become a nonresident of his former state?


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