Tag Archives: tax estimates

Tax Updates Early May

IRS Updates May 2023 by Paul Davis

Better Late Than Later

The IRS is urging taxpayers who missed the April 18 tax-filing deadline to file as soon as possible. Those who owe taxes should file quickly to minimize penalties and interest, which can accrue over time. For those who should receive a refund, there is no late-filing penalty. Some taxpayers automatically qualify for extra time to file and pay, including disaster victims, military members serving in a combat zone and support personnel, and taxpayers outside the United States. There are options for taxpayers struggling to pay their tax bill. 

May 15 Deadline for Tax-Exempt

The IRS reminds tax-exempt organizations that their filing deadline is May 15, 2023. Those operating on a calendar-year basis must file a return by this date. Form 990-series (information returns such as Form 990, 990-EZ, 990-PF), Forms 990-N, 990-T, and Form 4720 must be e-filed. Those requiring additional time to file beyond the May 15 deadline can request a six-month automatic extension, however this does not extend the time for paying any taxes due. Online Workshops are also available to help exempt organizations comply with their filing requirements. 

Tax Relief for Indiana Victims

Storm victims in Indiana now have until July 31, 2023, to file various federal individual and business tax returns and make tax payments. This relief applies to any area designated by the Federal Emergency Management Agency (FEMA) as a result of tornadoes, severe storms, and wind that occurred on March 31 and April 1. Taxpayers and businesses in Allen, Benton, Clinton, Grant, Howard, Johnson, Lake, Monroe, Morgan, Owen, Sullivan, and White counties qualify, in addition to any other areas later designated. This relief is automatic, and there is no need to contact the IRS unless an affected taxpayer incorrectly receives a late filing or late payment penalty notice. As always, an updated list of eligible localities is available.

Put Withholding Estimator to Work

The IRS suggests taxpayers get a head start on the 2024 filing season by using the Tax Withholding Estimator to help update the amount of tax to have taken out of their 2023 pay. It is especially useful after a major life change such as marriage, divorce, birth or adoption of a child, a home purchase, or a significant change in income. Those who received a large refund or owed a lot of tax this year would also benefit from using the estimator. To receive the most accurate estimate, have on hand recent pay statements (for both spouses if married), other income sources, and the most recent income tax return.

IRS Updates September 13

Estimated Taxes Due 15 September

The IRS reminds taxpayers who pay estimated taxes that the deadline for payment of their third quarter estimated taxes is September 15, 2022. Those who typically make quarterly estimated tax payments are the self-employed, investors, retirees, or those receiving income from dividends, interest, rental income, alimony and other sources not subject to withholding. Those who expect to owe at least $1000 in taxes for 2022 (after withholding and tax credits) should make quarterly payments. Special rules apply to some taxpayers, such as those in a federally recognized disaster area, farmers, fishermen, and those who receive income unevenly during the year. Underpaying taxes may result in a penalty.

National Preparedness Month

In recognition of September as National Preparedness Month, the IRS urges individuals, organizations, and businesses to update and secure their records. The ongoing threat of wildfires, as well as that of hurricanes, underscores the importance of having and keeping an updated emergency preparedness plan. 

  • The IRS recommends taxpayers keep critical documents inside waterproof containers in a secure space. This includes tax returns, birth certificates, deeds, titles, insurance policies and other such items. 
  • Copies should be made and given into the keeping of a trusted friend or relative at a distant location. Digital copies can be stored in a cloud-based application. 
  • Document inventory of personal and business property. Photos or videos are helpful, as well as written descriptions including year, make, and model of equipment. The IRS offers workbooks to help individuals and businesses compile inventory lists. 
  • Employers using payroll service providers should ensure their provider has a fiduciary bond in place to protect the employer against a possible default. Using the Electronic Federal Tax Payment System (EFTPS) to make federal tax deposits and business tax payments makes it easy and convenient to pay the government even when disaster displaces employees and businesses. Any business can create an EFTPS account.

Reconstructing records after a disaster may be required for tax or insurance purposes or getting federal assistance. For more information, visit National Preparedness Month.