What is the status of my federal income tax refund?

Log on to IRS’s website at http://www.irs.gov/Refunds or call them at 1-800-829-1040.

What happens if taxes are due and the amount cannot be paid?

If a taxpayer owes taxes and cannot pay the amount on time, the taxpayer can file a Form 9465 with IRS in order to pay the taxes on an installment basis.  There is a setup fee and there are also the regular customary interest and penalty charges by IRS.  The taxpayer can also go online and file an Online Payment Agreement (see our Helpful Links page).

If taxes are owed and the taxpayer cannot pay them on time, can a taxpayer file for an extension of time in order to “buy more time”?

Any taxpayer can file for an automatic extension of time to file his or her federal income tax return.  Individuals file a Form 4868 and entities file a Form 7004.  However, filing an extension merely extends the due date of the tax return, it does not extend the time for any payment of taxes.  Therefore, if a taxpayer owes taxes, those taxes are due on the original filing date of the tax return.  If those taxes are not paid on time, IRS charges late payment penalties and interest until the taxes are paid.

What are the late filing penalties for S-Corporations or Partnerships?

If a Partnership or S-Corporation federal income tax return is filed late (including extensions to September 15th of any given calendar year), IRS will penalize that entity in the amount of $195 per partner/shareholder per month (or portion of month) up to twelve months.  Therefore, if a calendar-year partnership has four partners and their extended partnership tax return is filed with IRS on December 20th of a calendar year, it would be considered four months late.  The resulting penalty would be $3,120 ($195 x 4 partners x 4 months late).  If an entity has a reasonable cause, they may be able to have IRS remove the penalty.  Forgetfulness or lack of funds to pay your tax preparer are not considered legitimate reasonable causes by IRS.

When must a retirement plan contribution be made?

Generally, taxpayers have until the filing due date of the individual’s or entity’s federal income tax return, including any extended due date for most retirement plans other than IRAs.  IRA contributions must be made by the filing due date of the individual’s tax return (usually April 15th) without taking into account any extended due date.

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