Deadlines and Extensions
For most taxpayers, the automatic extension granted by Form 4868 extends Form 1040 income tax return due date to:
October 15
A taxpayer may request an automatic six month extension by filing Form 4868 by the due date of the return. For most calendar year taxpayers, this extends the due date until October 15.
Patrick receives a salary from his employer. To avoid having to make estimated tax payments on his other income, which of the following is an option?
Ask his employer to take more tax out of his earnings.
If you receive salaries and wages in addition to other income, you may be able to avoid having to make estimated tax payments on your other income by asking your employer to take more tax out of your earnings. To do this, file a new Form W-4, Employee's Withholding Allowance Certificate, with your employer.
A refund may be directly deposited into which individual retirement account?
All of the above
A refund (or part of it) may be directly deposited to a traditional IRA, Roth IRA, or SEP-IRA, but not a SIMPLE IRA account. The trustee or custodian of the account must be notified of the year to which the deposit is to be applied. IRS Form 8888.
Ashleigh and Dino expect a $7,000 refund on their jointly-filed return. However, Dino has $45,000 in past-due taxes that he accrued before he and Ashleigh were married. Which form should they file in order to prevent Ashleigh's share of the refund from being collected?
Form 8379
A taxpayer is an "injured spouse" if he filed a joint return and all or part of his share of the refund was, or will be, applied against the separate past-due federal tax, state tax, child support, or federal non-tax debt of his spouse with whom he filed the joint return. An injured spouse may be entitled to recoup their share of the refund. The injured spouse files Form 8379 with a jointly-filed tax return when the joint overpayment was—or is expected to be—applied to past-due obligation of the other spouse. By filing Form 8379, the injured spouse may be able to get back his or her share of the joint refund. The taxpayer may file Form 8379 with a joint return, with an amended return, or by itself at a later time.
Jack Biggerstaff files his 20X1 federal income tax return on March 9, 20X2. Sometime later, he realizes that he accidentally omitted a large charitable contribution and he wants to file an amended return to increase his itemized deductions. When must he file this return in order for it to be acceptable?
Before April 16, 20X5
An individual must file an amended income tax return by three years from the due date of the return. The 20X1 return is due on April 15, 20X2 so the amended return must be filed before April 16, 20X5 to meet this three-year deadline. However, if the taxpayer filed the original return after the due date (with an extension, for example), the term is three years from the date of filing.
Travis did not make his estimated tax payments on time due to a disability. He would like to request a waiver of the penalty for underpayment of estimated tax from the IRS. What should he do in this situation?
He should file Form 2210 with his tax return and include documentation that shows his date of disability.
Certain taxpayers may request a waiver from the penalty. A taxpayer requesting a complete waiver can elect to have the IRS calculate the penalty, while a taxpayer requesting a partial waiver must calculate the penalty on Form 2210.
The taxpayer must attach Form 2210 and a statement to their tax return explaining the reasons for not meeting the estimated tax requirements and the period for the waiver request. All or part of the penalty for that underpayment will be waived if the IRS determines that the taxpayer retired after reaching age 62 or became disabled, and the taxpayer's underpayment was due to reasonable cause.
James files his 20X1 tax return on February 15, 20X2 and pays his entire tax liability of $2,000 on that date. When is the last day James can file a claim for refund of his $2,000?
April 15, 20X5
James has up to three years from the date for filing his return to file a claim for refund. Returns filed prior to the due date are considered filed on the due date (April 15).
In which of the following situations can an injured spouse claim be filed?
Both 1 and 2
A person may be an injured spouse if filing the return could impair their refund. A taxpayer may be an injured spouse if they file a joint tax return and all or part of their portion of an overpayment was, or is expected to be, applied (offset) to their spouse's past-due obligation. Form 8379, Injured Spouse Allocation can be filed with the joint tax return, amended tax return, or by itself after the tax return has been filed subject to the statute of limitations for claiming a refund.
Jason is a doctor who provides humanitarian services for the Red Cross. He is required to file a US tax return, but on the due date for his return, he is in Afghanistan performing duties for the Red Cross. He arrived in Afghanistan (a qualified combat zone) on December 1, 20X1, and returned home on August 20, 20X4. When is the latest date that Jason can file and pay his 20X3 taxes?
He must file within 180 days of leaving the combat zone, plus an additional 3 1/2 months
A person serving in the Red Cross or under the direction of the military while in a qualified combat zone receives the same treatment as military personnel. When individuals serve in a qualified combat zone, the deadline for filing and payment increases by 180 days after the latter of the last day in a qualified combat zone, or the last day of a continuous hospitalization related to injury from service. In addition to the 180 days, a service member in a qualified combat zone can receive a deadline extension of up to three and a half months, based on the number of days remaining to file upon entering the combat zone. This is representative of the time normally allotted for filing taxes (January 1 to April 15). If entering the combat zone before the first of the year, the service member may add the entire three and a half months to the 180-day extension. Therefore, Jason must file within 180 days of leaving the combat zone, plus an additional 3 1/2 months.
Which of the following is true regarding estimated tax payments:
If the taxpayer files Form 1040 by January 31 and pays the rest of the tax due, they do not need to make the estimated tax payment that would have been due on January 15.
If the taxpayer files Form 1040 by January 31 and pays the rest of the tax due, they do not need to make the estimated tax payment that would have been due on January 15.
Keep in mind that the only estimated payment impacted here is the one due January 15, the 4th installment of estimated tax. All other payments must be made on time.
Who chooses the date when installment payment is due?
The taxpayer
The taxpayer can choose the day of each month the payment is due. This can be on or after the 1st of the month, but no later than the 28th of the month. When the IRS approves the request, it will notify the taxpayer of the month and day that the first payment is due. If the IRS has not replied by the date chosen for the first payment, the taxpayer can send the first payment to the applicable IRS center listed on Form 9465.
Jim and Tammy, husband and wife, were both employed and filed a joint return which showed they were entitled to a refund of $1,000. Rather than receiving the refund of $1,000, they received a notice advising them that the entire refund was applied to an amount due that Jim owed from a prior year, which was before they were married. Can Tammy do anything to collect her portion of the refund?
Yes, she could be considered an injured spouse and should file Form 8379.
A person is an injured spouse if his share of the overpayment shown on his joint return was, or is expected to be, applied (offset) against his spouse's legally enforceable past-due federal taxes, state income taxes, child or spousal support payments, or a federal nontax debt, such as a student loan. If a spouse is an injured spouse, he may be entitled to receive a refund of his share of the overpayment by filing Form 8379, Injured Spouse Allocation.
Jason is a doctor who provides humanitarian services for the Red Cross. He is required to file a US tax return. He went to Haiti to perform duties for the Red Cross during Operation Unified Response, which was designated as a contingency operation. He arrived in Haiti on December 1, 20X1, and returned home April 21, 20X2. Without considering a potential leap year, when is the latest date that Jason can file and pay his 20X1 taxes?
Jason must file and pay his 20X1 taxes by January 31, 20X3
Deadlines for taking care of a variety of federal tax matters are automatically extended for persons serving in a combat zone or a contingency operation. Operation Unified Response (Haiti relief) is a contingency operation, thus giving designated persons providing earthquake relief in Haiti the same extensions that are available to military and support personnel serving in Iraq, Afghanistan, and other combat zone localities.
When individuals serve in a qualified combat zone, the deadline for filing and payment increases by 180 days after the latter of the last day in a qualified combat zone, or the last day of a continuous hospitalization related to injury from service. In addition to the 180 days, a service member in a qualified combat zone can receive a deadline extension of up to three and a half months, based on the number of days remaining to file upon entering the combat zone. This is representative of the time normally allotted for filing taxes (January 1 to April 15). If entering the combat zone before the first of the year, the service member may add the entire three and a half months to the 180-day extension.
The normal tax filing deadline for his 20X1 return is extended to January 31, 20X3 (285 days after leaving the contingency operation on April 21, 20X2). The time allotted to the extension related to the contingency operation is 180 days + 105 days in 20X2 he had to file and was performing services in support of the military.
The suspense period is extended by an additional 105 days (106 in a leap year) if the taxpayer was in the combat zone the entire filing season.
The tax shown on Janet's 20X1 return was $11,000. Her expected tax liability for 20X2 is $12,000. Tax expected to be withheld in 20X2 is $10,900. Which of the following statements is true?
Janet is not subject to the estimated tax penalty because her withholding is more than 90% of her 20X2 tax liability.
She is not subject to the penalty even though she will owe at least $1,000 in 20X2 after withholding and credits. Her withholding and credits for 20X2 of $10,900 will be MORE than 90% of her 20X2 tax ($12,000 expected tax liability for 20X2 × 90% = $10,800).
Estimated tax liability exists when both of the following conditions exist:
A claim for refund must be filed?
3 years from date for filing the original return or 2 years after paying the tax, whichever is later
Generally, you must file your claim for a credit or refund within 3 years after the date for filing your original return or within 2 years after the date you paid the tax, whichever is later. Returns filed before the due date (without regard to extensions) are considered filed on the due date.
Tom Smith has been doing very well playing cards in a regularly held illegal poker game. He has won nearly $50,000. Because he knows his wife disapproves of gambling, he has not told her about any of this and has kept the money he's won in a box in their attic. The IRS found out about the card game and sought to recover taxes due from Tom and his wife, who have always filed MFJ. What should his wife do to protect herself from liability?
Promptly file an innocent spouse form.
A spouse who reasonably did not know about income her spouse did not report should file Form 8857, Request for Innocent Spouse Relief, as soon as she becomes aware of a tax liability for which she believes only her spouse or former spouse should be held responsible. Without filing for relief, if the Smiths divorced, Mrs. Smith would still be liable for the tax on the unreported gambling income because it was income during their marriage. Spouses who file MFJ are jointly and severally liable for tax liability that arises during their marriage.
Roberta is in the Army, stationed in Hamburg, Germany on the due date for her return. She is a US citizen and is required to file a US tax return. She reported to duty in Hamburg on March 15, 20X1, and has been there ever since. What is the latest deadline for Roberta to pay her 20X2 taxes?
She can file and pay by June 15, 20X3 under an automatic 2-month extension as she is out of the country on active military duty.
Roberta automatically receives a 2-month extension to file and pay. A taxpayer who is a U.S. citizen (or resident) may receive an automatic 2-month extension to file a return and pay any federal income tax due if, on the due date of the return, they are in the military or naval service on duty outside the US and Puerto Rico, or live and maintain a main place of business outside the United States and Puerto Rico. Interest applies from the due date until paid. The taxpayer must attach a statement to their return explaining which situation applies.
The 180-day plus 3 1/2 months extension does not apply since Germany is not a qualified combat zone.
Violet made no estimated tax payments for 20X1 because she thought she had enough tax withheld from her wages. In January 20X2, she realized that her withholding was $2,000 less than the amount needed to avoid a penalty for the underpayment of estimated tax, so she made an estimated tax payment of $2,500 on January 10, 20X2. Violet filed her 20X1 return on March 1, 20X2, showing a refund due of $100. Which of the following statements is not true regarding the estimated tax penalty?
Violet will not owe a penalty for any quarter because her total payments exceed her tax liability.
This question asks which one of the following responses is not true regarding the estimated tax penalty. The correct answer is the one incorrect statement.
It is not a correct statement that Violet will not owe a penalty for any quarter because her total payments exceed her tax liability. This statement is incorrect because each payment period has a specific due date and the taxpayer may be charged penalties if she does not pay enough tax by each of the payment periods. This is true even if the taxpayer is due a refund when filing the tax return.
For estimated tax purposes, the year is divided into four payment periods. Each period has a specific payment due date. Estimated tax payments are due by the 15th day of the 4th, 6th, 9th and 1st month of the following year. These payments reflect the income earned in the quarter prior to the due date. The IRS may issue a penalty even if a refund is due when a sufficient amount of tax is unpaid by the due date for each payment.
Tim wants to use his refund to buy $2,500 in savings bonds for his nephews. Which form does Tim have to complete and return?
Form 8888
Use Form 8888 if you want to use your refund to buy up to $5,000 in Paper I Bonds.
Danielle expects a large refund this year. She was shocked when her husband informed her that all of her refund will be applied against his delinquent student loans when they file a joint return. Her tax preparer suggested filing an injured spouse claim as a way to prevent this from happening. Which of the following is NOT a proper method for filing an injured spouse claim?
Attach Form 8379 with Form 1040 and file as MFS
The correct answer is the choice that is not a proper method for filing an injured spouse claim.
The injured spouse files Form 8379 with a jointly filed tax return (cannot file MFS) when the joint overpayment was—or is expected to be—applied to a past-due obligation of the other spouse. By filing Form 8379, the injured spouse may be able to get back his or her share of the joint refund. The taxpayer may file Form 8379 with a joint return, with an amended return, or by itself at a later time.
A taxpayer may file Form 8379, Injured Spouse Allocation, separately after the taxpayer files a joint return with his (or her) spouse. If the taxpayer files Form 8379 separately, the taxpayer should attach a copy of all Forms W-2 and W-2G for both spouses, and any Forms 1099 showing federal income tax withholding, to Form 8379.