Other Situations That Require Filing A Tax Return
In addition to requirements based on age, your filing status and income, and the rules regarding the Affordable Care Act and self-employment income, there are several other situations that require you to file a tax return.
For example, if you owe any special taxes, such as the alternative minimum tax extra taxes on qualified plans like an IRA household employment taxes for employees like nannies, housekeepers or gardeners or tips you didnt report to your employer, then you need to file a federal return. You must also file if you had write-in taxes that might include taxes on group term life insurance or health savings accounts. In addition, you have to file if you have recapture taxes on the profitable sale of an asset.
Another instance which requires you to file a return is if you or your spouse received distributions from a health savings account, Archer MSA or Medicare Advantage MSA.
If you worked for a church or a church-controlled organization that is exempt from paying Social Security and Medicare taxes and you had wages of $108.28 or more, youre required to file a return.
Finally, if you have a tax liability and are making payments under an installment agreement, you must file a return.
What Is A 4506
Use Form 4506-T to request a transcript of previously filed tax returns free of charge. It contains most of the line items on your full return and is widely accepted by most lenders. Mortgage lenders and student loan lenders, for example, will often ask you to fill out this form to verify your income. With COVID-19 delaying processing of paper forms at the IRS, an easier and faster option is the IRS online Get Transcript tool.
Best for:People who need a transcript of their tax return free of charge.
What Happens If You Don’t Pay Taxes
You may be subject to penalties and interest on the overdue balance if you fail to file or pay taxes on time. These accumulate the longer you go without making payment. The IRS can take further collection actions if you accrue a large enough balance, such as putting a lien against your bank accounts or home. Reach out to the IRS promptly to make arrangements and avoid these penalties if you think you will have trouble paying your taxes.
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What Should I Do If The Irs Lost My Tax Return
If you got a notice from the IRS saying that they never received your tax return , respond and do what they request you to do ASAP. They will likely ask you to resend a signed copy of your tax return.
In case the IRS didnt contact you, what you should do next depends on the original method you opted to file your tax return.
- If you e-filed your tax return:
Whether you filed your tax return directly on the IRS website or through a third-party tax company or service like TurboTax or H& R Block, log into the account that you used to file your tax and check the status of your return.
- If your return was rejected: you would need to either correct the issues causing the rejections and e-file your return again or file the return by mail.
- If the return was accepted: find and write down your declaration control number . It is a 14-digit number that is given to each tax return. Then contact the IRS at 800-829-1040 and tell them your DCN and the date you e-filed.
BONUS TIP: How to call the IRS
To contact the IRS, dial 800-829-1040 between 7 a.m. and 7 p.m. local time, Monday to Friday.
After choosing your language , do NOT choose option 1, Refund, otherwise, youll be directed to an automated phone line. Instead, press 2 for Personal Income Tax. Then, press 1 for Form, Tax History, or Payment, ? press 3 for all other questions, ? press 2 for all other questions.
After that, you should be connected with an agent.
- If you sent your tax return by post:
What If The Requested Tax Instalments Total Less Than I Owe
CRA wont charge you interest for whatever additional tax you owe, so long as you paid the requested amounts. In other words, its not your responsibility to predict that the tax instalments werent high enough. Youre only responsible for paying the lesser of a) what you owe, or b) what CRA requested of you.
For example, lets say CRA is asking for tax instalments because you owed $3,600 in tax last year. But you suspect youre only going to owe $2,000 this year, so you take that amount and pay four tax instalments of $500 each. If youre right and you dont owe tax at the end of the year, theres no interest charge for paying less than the requested tax instalments.
If you want to play it safe, always pay the requested amount. If it turns out to be too much, youll get a refund when you file, or a credit toward next years taxes. Nothing gets lost.
To learn more, check out CRAs pamphlet on Tax Instalment Payments here.
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Whats Next: When Will I Get My Tax Refund
Once youve resolved all the problems related to your returns, you enter the next worrying stage: When will I get my tax refund? No wonder why everyone hates dealing with taxes.
Honestly, theres nothing much you can do apart from waiting to hear from the IRS. According to the IRS, most tax refunds are issued within 21 days, while some may take longer if the return requires further review, which may be prompted by the following issues::
- Your return includes errors
- Your return is incomplete.
- Your return is affected by identity theft or fraud.
The IRS will contact you by mail if extra information is needed to process your tax return.
To track and stay updated about the process of your refund, consider one of the following methods:
- Visit Wheres My Refund?: enter your Social Security number or individual taxpayer identification number , filing status, and the exact amount of your refund to check your refund status.
- Download the IRSs mobile app IRS2go: prepare the same above-mentioned personal information details to track your refund.
How Do I Get Help Filing My Taxes Online
If at any point you have a question about your taxes or the software, you can browse answers on our online help forum 24/7, or post a question for our online community of users and experts. While youre filing you may realize that youre looking for more guidance or help with your taxes. In that case you can upgrade to a different TurboTax Online product at any time without losing any of the data youre already entered.
Need more help? TurboTax Live Assist & Review gives you unlimited tax advice from one of our tax experts as you do your taxes, plus a final review before you file to make sure you didnt miss anything. Or if you want to hand off your taxes to one of our experts, TurboTax Live Full Service allows you to simply upload your documents and our experts will complete and file your return for you.
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What Is A W
Use Form W-4, also called Employees Withholding Certificate, to tell your employer how much in taxes to withhold from your paycheck. Any time you start a new job, your employer will ask you to fill this out. The W-4 will help you determine the correct amount to have your employer withhold if you ask your employer to withhold less, you will still owe the remaining tax, plus, in some instances, a penalty. The IRS online Tax Withholding Estimator can help you fill out this form correctly.
Best for:People with new jobs, a change in income or other significant financial or family changes.
What If I Have Received Cerb Or Crb Instead Of Ei
If you receive EI for your job loss, you should not apply for CERB, CRB, or other emergency benefits. If you have received an emergency benefit by mistake, please call the EI department and request a change in your benefits .
If the mix-up has not been fixed by the time you file your tax return, you report your emergency benefit as indicated on your T4A slip or your T4E slip. Keep in mind that you will be required to pay taxes on the full CERB payments since no taxes have been withheld at the source.
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What Do I Need To File Taxes
Employees need W-2s and non-employees, including contractors or gig workers, need 1099s. These forms were either mailed to you in February or are available online through your payroll company.
Freelancers:
Banks are also required to send 1099s to customers who received interest or dividends.
If you still don’t have your W-2 by the tax deadline, you can use the W-2 substitute, Form 4852, and estimate your wages and withheld taxes. Note that the IRS could delay your refund while verifying the information.
You’ll also need your adjusted gross income from the previous year to sign and file your tax return.
How Do I Pay Quarterly Estimated Taxes
You may have to pay quarterly estimated taxes to avoid a penalty at the end of the year if you don’t have enough taxes withheld from your paycheck, or if you receive income from self-employment or another source that doesn’t withhold taxes on your behalf. Use Form 1040-ES to calculate your estimated taxes, then submit your payments via mail or through the IRS online EFTPS payment portal before the quarterly deadlines.
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Can I Get More Time To File Without Asking For An Extension
In the U.S., victims of natural disasters typically get more time to file taxes automatically. This year, victims of the December 2021 tornadoes and flooding in Arkansas, Illinois, Kentucky and Tennessee, as well as victims of the December wildfires in Colorado, have until May 16, 2022, to file their 2021 returns and pay any tax due. Victims of severe storms, flooding and landslides in Puerto Rico that began on February have until June 15 to file and pay.
This extension is granted automatically to addresses within a federally declared disaster area there’s no need to get in touch with the IRS to ask for an extension.
Also, military service members or support personnel in combat zones have more time to file. They have at least 180 days, or about six months, after they leave the combat zone to file their tax returns and pay any tax due, the IRS notes. A list of designated combat zones is here.
U.S. citizens and resident aliens working abroad also have until June 15 to file their returns and pay taxes due, although any unpaid taxes will accrue interest at the rate of 4%, componded daily, after April 18.
Set Up A Payment Plan
The IRS offers payment plans if you can’t pay all or even anything you owe right away. The important thing is that you don’t ignore your plight, hoping that it will go away, because it won’t.
You can set up a monthly installment agreement with the IRS, allowing you to pay what you owe over time. You can even decide how much you want to pay per month, at least to some extent. The entire balance has to be paid off within 72 months, so your minimum payment would be what you owe divided by 72. Leave some room for interest and penalties when you’re making your calculations.
You’re not prohibited from paying more than the amount you’ve committed to in any month, and you can retire the debt sooner and minimize interest charges by doing so.
The IRS will still charge the late-payment penalty as well as interest, and there’s a one-time processing fee to set up the plan$149 as of 2021. But if you apply for the installment agreement online, and if you agree to have the monthly amount taken from your bank account by direct debit, this one-time processing fee drops to $31. Direct debit is required if you owe more than $25,000.
You don’t have to qualify for the installment agreement by submitting a collection information statement to prove your assets and income, at least not if you owe less than $50,000. You can apply online using the Online Payment Agreement Application on the IRS website.
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How Do I Prevent Fraud
It’s easy to procrastinate filing your taxes, but putting it off makes you more vulnerable to fraud. If a scammer gets hold of your Social Security number and you haven’t filed a tax return yet, they could easily file a fake one in your name to get a refund.
Scam calls are ubiquitous during tax season. Keep in mind that if the IRS needs to get in touch with a taxpayer, it sends a letter not an email, not a phone call, and definitely not a message over social media. Especially when it’s investigating cases of tax fraud or performing an audit.
Never return a phone call from someone claiming to be with the IRS. Instead, individuals should call the IRS directly at 800-829-1040, and businesses should call 800-829-4933.
The US Department of Justice says the IRS never discusses personal tax issues through unsolicited emails or texts, or over social media. Always be wary if you are contacted by someone claiming to be from the IRS who says you owe money.
If you receive an unexpected and suspicious email from the IRS, forward it to .
Understand How Your Taxes Are Determined
The government decides how much tax you owe by dividing your taxable income into chunks also known as tax brackets and each chunk gets taxed at the corresponding tax rate. The beauty of this is that no matter which bracket youre in, you wont pay that tax rate on your entire income.
The progressive tax system in the United States means that people with higher taxable incomes are subject to higher federal income tax rates, and people with lower taxable incomes are subject to lower federal income tax rates.
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Are My Taxes Still Due At The Same Time
Individual tax returns and payments are due on April 30th, while self-employed returns are due on June 15th. In some extreme cases, the CRA might mandate an extension of the deadline this will be announced by the CRA if/when they make the decision to do so, any given year. Until such time, ensure that you are still completing your taxes by the appropriate deadline, and paying any taxes owing by April 30th.
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Don’t Fail To File Because You Don’t Have The Funds
Many people don’t file a tax return because they say they don’t have the money to pay the tax they owe. That’s a major mistake that can cost you a lot of money. The penalty for failing to file a return is 5% of the unpaid taxes for each month that your return is late, up to 25% of your unpaid taxes.
And, if you fail to pay the tax you owe by the April deadline, you’ll have to pay 0.5% of the unpaid taxes for each month that the return is late, up to 25% of your unpaid taxes.
So, pay what you think you’ll owe by April 18. If you’re afraid of receiving a tax bill you know you can’t afford right now, consider applying for a payment plan. And if you don’t think you can finish your return in time, request an extension by April 18 and you won’t have to submit your return for six months or until Oct. 17.
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How To Minimize Rrsp Taxes At Age 65
Below are some factors you should take into consideration for getting the most out of your RRSP and pension benefits.
Consider chatting with a licensed financial advisor to assess your options.
It may make sense to withdraw RRSP funds early before age 65 if it helps maximize your CPPand OAS benefitsby delaying them till later. You will take an immediate tax hit on the withdrawal and can invest the excess funds in your TFSA if you have contribution room.
You could convert your RRSP to an RRIFearlier in order to take advantage of the pension income tax credit.
RRIF withdrawals qualify for this tax credit, and this can help you save up to $300 in several taxes each year.
There are also provincial pension income tax credits on eligible pension income.
Another advantage of RRIFs is that you can split RRIF income with a spouse and you can both take advantage of the pension income tax credit.
TFSA withdrawals are not included in your taxable income and do not impact income-tested benefits like the OAS and Guaranteed Income Supplement.
If you are in a low-income tax bracket, during your working years, it may make sense to first contribute the maximum to your TFSA before making RRSP contributions.
Plan your RRSP/RRIF income withdrawals so that your overall taxable income stays below the next upper tax bracket, or it is below the level at which OAS clawbackoccurs.
