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Filing Taxes Late? Here Are Some Excuses That Actually Work With the IRS

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While filing your federal taxes on time is ideal, sometimes being late is unavoidable. Usually, this means dealing with fees like failure-to-file or failure-to-pay penalties. However, while you might imagine the Internal Revenue Service to be unforgiving, that isn’t always true. There are certain situations that even the IRS will accept for filing taxes late.

Prolonged Health Issue

If you have a long-term health issue, particularly chronic or mental illnesses, the IRS may waive any penalties. You can increase your odds of avoiding additional fees if your condition causes issues with either short-term memory or the ability to concentrate.

Late tax filers who want to use this excuse, should know that the IRS might ask for proof of your medical situation. Typically, this could include hospital records or a letter from a qualified physician who can attest to your health state.

An IRS Phobia

Everyone gets overwhelmed at times. If genuine feelings of anxiety make it impossible to file your taxes because of extreme fear. The IRS might be surprisingly understanding.

Like prolonged health issues, you can’t use this excuse without some real proof. Since it is mental health related, a letter from a medical professional is likely a must.

Stolen Records

If, for example, there was a burglary and the thieves stole your computer with all of your documents, the IRS may waive any late filing-related fees. You will need something formal to present that shows you were the victim or such a crime. You should obtain a police report. Otherwise, the IRS may not accept this excuse.

Damaged Records

Similar to stolen records, if you’ve lost tax documents in a fire or natural disaster, you might be able to get a waiver of the fees for filing late. Additionally, if a large-scale natural disaster made it impossible for you to file on time, regardless of whether you had your records available, you might also be able to file late without a penalty.

Grieving

Those who have recently lost a loved one may be able to file their taxes late without a penalty. Typically, you can only cite this as a reason for not filing on time if the person who passed was a very close family member. Additionally, you might have to submit proof that the person died, like a death certificate.

Other Reasonable Causes

The IRS may waive any penalties for other reasons as well, as long as the IRS deems the cause reasonable. Note that the IRS will examine each situation on a case-by-case basis, and will carefully consider any justification for being late.

However, even if you feel the cause is reasonable, it does not mean the IRS will agree. It is ultimately the IRS’s decision.

Excuses That Will Not Work on the IRS

People have used some interesting approaches in an attempt to get out of filing their taxes or filing late. While the IRS does understand that some things in life are outside of a tax filer’s control and will try to be lenient, some excuses are practically guaranteed to fail.

For example, trying to claim that filing taxes is against your religion is not going to work. All individuals who earn an income have to file and pay any taxes owed, regardless of their religious preference.

Similarly, claiming ignorance will not do the trick either. Whether you understand the tax law is irrelevant as far as the IRS is concerned, so saying that you didn’t know what you were supposed to do is not going to get you out of any penalty fees.

You also can’t blame your tax preparer if your taxes are late. Ultimately, making sure you’ve filed your taxes on time is your responsibility, so you can’t just pass the buck because you use a person to make sure your taxes are correct.

First-Time Penalty Abatement

On a positive note, if you have never been late filing your taxes before, you may be able to get the fees waived as part of the First-Time Penalty Abatement policy. Essentially, it serves as a possible “get out of jail free” card that you can use once during your lifetime, showing that even the IRS can forgive a person for making a mistake.

However, there are some requirements. For example, you need to have no penalties for the three tax years prior, have paid or arranged to pay any taxes that were due, and otherwise be up-to-date with your filings.

Ultimately, there are some reasons that the IRS will accept as a reasonable excuse for not filing on time. But, ideally, it is better to avoid filing late in the first place. If you know you’ll be late, consider requesting an extension. If approved, you could get an additional six months to file, allowing you to avoid the failure-to-file penalty at a minimum.

Have you ever had to file your taxes late? Share your experience in the comments below.

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2019 Average Tax Refund and What You Can Expect

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If you haven’t done your taxes yet, you may be a bit worried about how much money you’re going to get back in your refund this year. There were a lot of new tax changes that affected the average 2019 tax refund. Moreover, there are a lot of tax myths related to those changes. As a result, it’s easy to feel confused or overwhelmed by this year’s taxes, unsure of what kind of return you’re likely to see.

2018 Tax Changes

The Tax Cuts and Jobs Act (also known as the Tax Reform Bill) went into effect with 2018’s taxes. There are quite a few changes. However, overall, they tend to have the effect of financially benefitting lower-income and middle-income individuals and families. Thanks to changes in standard deductions, as well as various changes to tax credits, these individuals should be able to keep more of their money than ever before.

Are Tax Refunds Smaller This Year?

Many people are concerned that their tax refund will be a lot smaller this year despite the financial benefit of those reforms. That’s because much of the benefit comes throughout the year, rather than at tax time. People get the chance to take home more of their paycheck rather than paying as much in to taxes. Therefore, they get to keep more money, but it’s spread out throughout those paychecks, which means that the lump sum refund at tax time may be smaller than it was in year’s previous.

Some people don’t like this. Even though they get more money, they like the chance to get a big refund. They count on that to pay off debts that accrued since last year or have enough cash for a nice summer vacation. Of course, if you save regularly throughout the year, then you still have that money. However, if you are in the habit of relying on that annual refund, you might have some anxiety that it could be a lot smaller refund this year.

Don’t worry. Even though many sites have reported that refunds will be smaller than usual, the newest data suggests that is not the case. People who have already received their refunds tend to report that they receive the same, or even more than years previous. This has been a surprise to many filers. Of course, you won’t know what your own return will be until you run the numbers to file your taxes. Every situation is unique.

Average Historical Tax Refunds

Credit Sesame recently published data showing the average tax refund for each year from 2010 – 2019. (Of course, the 2019 data is for 2018’s taxes, filed this year.) They drew the data using a survey from IRS.gov taken in the first few months of 2019. They surveyed 1500 people to get the average for this year. Naturally, the average for the year may change as more and more people finish filing their 2018 taxes.

According to this date, the lowest average amount over the past years has been $2651 in 2013. The highest average return is $3068, which is the average tax refund for 2019. In other words, despite all of the rumors, and the changes in tax laws, the average 2019 tax return is the highest amount it has been since at least 2010.

This is a small increase over last year. The 2018 average tax refund was $3046. So, on average, people are getting back over$20 more this year than last year when they get their tax refund. In all of the previous years, except back in 2010, the average tax refund was under $3000. Therefore, most people have found that they’re getting back more than they expected and more than they are used to.

Average 2019 Tax Refund Across Five Generations

Of course, people’s incomes vary widely. Therefore, tax refunds are also very different. Just because the average refund for 2019 is $3068 doesn’t mean that’s what you personally are going to get back. Only you can find out exactly what that number is. However, you can get a more accurate sense of your likely tax return this year by looking at the average tax return for your generation.

The Silent Generation will get the least back this year. On average, they will receive a 2019 tax refund of $1648. This makes sense because the people in this older generation who are still working may only be working part-time. If you don’t earn a lot, then you don’t owe a lot, but you also don’t get a lot back come refund time.

The next-oldest generation is the Baby Boomer generation. They are getting the most back this year. Their average 2019 tax refund is $5403. Those Baby Boomers who are still working are probably in fairly high-paying jobs, having worked their way up throughout their whole lives. Additionally, they may have a number of dependents, including children as well as their own aging parents. As a result, they get back significantly more than the other generations do.

Of the younger three generations, Generation X is getting the least back this year. With an average tax refund of just $2021, they aren’t getting back much more than the Silent Generation is. Millennials fare a little bit better with an average tax refund of $2565. Generation Z is getting the most back besides the Baby Boomers; they have a 2019 average tax refund of $3703.

More People Are Saving Tax Refund Money

One of the most interesting things to come out of this tax refund survey is about how people are choosing to use those tax refunds. More people are choosing to put their tax refund into their savings accounts. In 2018, about 41% went to savings. In contrast, 50% is going to savings this year. More and more people are recognizing that they need to plan for their financial future. In fact, other than savings, the biggest chunk of tax refund money is going to pay down debt. People are spending a little bit less on everyday expenses and other random things than before and slightly more on home improvement, which can improve the financial value of the home. People understand that they should put their tax refunds to work for them.

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How Do You Get a Hold of a Live Person at the IRS?

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One of the biggest points of confusion about the Tax Cuts and Jobs Act concerns was when the changes would take effect. That’s one of the myriad questions that have both taxpayers and accountants placing more calls than ever to the Internal Revenue Service. So you want to get a hold of a live person at the IRS. Well, how do you do that and how much time do you have to wait?

If you don’t have time to wait, well, you might not need to. You can check the status of your tax refund by visiting the secure page on the IRS website. The agency says that it issues nine out of 10 taxpayers’ refunds within 21 days of filing and the earlier you file, the sooner you get that refund.

Average Wait Times for a Live Person at the IRS

Still want to try to get a hold of a live person at the IRS? Well, the average wait time to get a hold of a live person at the IRS supposedly lasts only 15 minutes, but some extensions may have much longer wait times. Wait times are also longer on Monday and Tuesday, during Presidents Day weekend and the month of April.

Although the IRS website states that wait times are nearly double this amount of time during the off season from May to December, what that actually means is that the agency has dedicated fewer customer service agents to handle calls at those times.

That said, the IRS staffs its hotlines with customer service representatives from 7:00 am to 7:00 pm local time. Once you key in your identification number, you are queued accordingly, except that callers from Alaska and Hawaii are asked to follow Pacific Standard Time, and agents serving Puerto Rico only serve from 8:00 am to 8:00 pm in that time zone.

IRS Phone Numbers

Before you pick up the phone and start dialing the IRS, know in advance that the phone system will try to steer you toward an automated voice response unit if you choose the menu option for refund information. Instead, select option 2 for personal income tax — when you’re calling the consumer line, that is.

Speaking of which, people complain of getting busy signals when calling the IRS, and the official word on that outcome is to check whether you’re dialing the most current phone number for the agency. Numerous websites list outdated numbers, so instead of phoning one of those, try calling one of the numbers listed below.

  • Individuals
    800-829-1040
  • Businesses
    800-829-4933
  • Hearing Impaired
    800-829-4059
  • Tax Exempt organizations, retirement plan administrators, and local government
    877-829-5500 (Monday through Friday, 8 a.m. to 5 p.m. local time)
  • Estate and gift tax questions:
    866-699-4083 (Monday through Friday, 8 a.m. to 4 p.m. Eastern Standard Time)
  • Excise taxes
    866-699-4096 (Monday through Friday, 8 a.m. to 6 p.m. Eastern Standard Time)

Is It Even Possible Talk to a Live Person at the IRS?

Meanwhile, you might be able to book an in-person appointment at a local office of the IRS. This is the kind of thing you might do if you want to set up a payment plan to take care of back taxes.

Some locations have walk-up windows but during tax filing season, the wait time can be daunting. One aggressive tactic: Get to the office location two hours before opening time and you can be one of the first in line to see someone in person.

Find an office near you by using the Taxpayer Assistance Locator tool on the IRS website, and then call 844-545-5640 to schedule an appointment.

If you’re feeling frustrated over how difficult it can be to get a hold of a live person at the IRS, maybe what you actually need is a type of middleman: Hire an accountant if you haven’t already, and hopefully you’ll be able to get through to him or her in a timely fashion.

Readers, have you tried to contact the IRS about your taxes in the past — and if so, how did it go? What questions are confusing you this tax filing season?

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When Do You Pay Taxes on Bitcoin and Other Cryptocurrency?

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Taxation of bitcoin and other cryptocurrencies is pretty similar to the way you pay taxes on any other type of investment. And regulators are slowly but surely making it harder and harder to evade this type of tax.

You pay capital gains taxes when you sell a cryptocurrency like Bitcoin, whether you harvest into dollars or any other currency.

If you had held the cryptocurrency for less than a year, the sale is taxable as income tax; hold it for more than a year before selling it, and you pay the capital gains tax rate, which is lower.

How to Pay Taxes on Bitcoin

The only thing related to cryptocurrency that you need to report to the Internal Revenue Service concerns sales of cryptocurrency into any other currency you get to declare a loss or gain.

(If you own any cryptocurrency funds and they paid dividends, you’d have to pay taxes on those dividends but it’s highly unlikely that a crypto fund would  be paying dividends anytime soon.)

You report this activity in Schedule D of your tax return. Input the difference between what you paid for the currency and what you sold it for. If you made money, it’s a capital gain. If you lost money, it’s a capital loss.

The IRS Always Knows

Like it or not, the IRS will eventually get wind of your crypto trading profits, as it is now privy to information from any U.S. exchange you might have transacted on; the agency essentially won the right to this data in court in November.

Spare yourself the interest and penalties you might end up owing from attempting to not report capital gains on cryptocurrencies. The IRS typically takes at least six months to catch up on nonpayments, so you’ll end up owing extra money as interest or penalties.

And even if you did a cryptocurrency transaction on a site that is not based in the U.S., and move the funds into a currency other than the dollar, these sites aren’t immune to the tax treaties that the IRS has already been brokering with foreign countries.

It might take longer for the IRS to obtain information on activities on foreign sites, but eventually, the prevailing trend in the IRS’ fact-finding will play out here as well.

Although cryptocurrencies’ origins included a lack of real taxation on them — and policies to support that — slowly but surely regulators around the world are making it harder for people to dodge this type of tax.

For more information on how the IRS handles cryptocurrencies, click here.

Readers, are you still confused about whether there are taxes on bitcoin or other cryptocurrencies?

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What Are the Post Office Hours on Tax Day 2019?

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April 15, 2019, is the federal deadline for filing your 2018 taxes with the Internal Revenue Service (IRS). Unless you apply for an extension – allowing you to file any time up to October 15, 2019 – your tax documents need to be on their way to the IRS on or before 11:59 pm on April 15. While most people do not file paper returns, some still do. If you have yet to file your taxes and want to make sure the post office will be ready to accept your return on tax day, here is a look at the post office hours on ax day.

Post Office Hours on Tax Day

The post office maintains its regular schedule on tax day. For most locations, the post office is open starting at some point between 8:00 am and 8:30 am and are open until 5:00 pm or 6:00 pm.

The exact schedule varies by location, and those details are available on the USPS website. During the listed hours, post office staff are available to assist customers. This includes accepting a filer’s tax return and ensuring the envelope is postmarked before the deadline.

Additionally, some post offices will open later on tax day, providing filers with additional time to drop off their returns. But one of the only ways to find out if your location will have extended hours is to contact your post office directly.

In some cases, local newspapers will also publish details about extended post office hours on tax day. However, this may be dependent on them being available in your area, as not all locations adjust their schedule.

It is important to note that some locations are always open longer than the typical schedule. For instance, a couple of post offices in Miami are open from 7:30 am to 9:00 pm, Monday through Friday. If you aren’t sure when your post office is usually open, then make sure to check the USPS website or contact your location directly.

Mailing Tips for Federal Tax Returns

If you are filing by mail, getting your federal tax return to the post office before the 11:59 pm deadline on April 15 is critical. Otherwise, your return is considered late, and you could be stuck with a penalty if you did not request an extension.

There are also other things you need to do to make sure your return can reach its destination. Make sure you check the IRS website and get the proper address. The address you need to use depends on your state of residence. Plus, there are different addresses for people who are and are not sending a payment with their return.

You also need to make sure you have the right amount of postage. If you don’t use enough postage, your tax return will be sent back to you instead of to the IRS. That will cause your return to be late and can lead to a penalty.

If you are not sure if you have enough postage, then it is best to drop your return off inside the post office with an employee. They can weigh your return and make sure you have the proper amount of postage. If you don’t, then you can pay for more while you are there, ensuring your return can head on its way.

While it isn’t required, you may also want to pay for certain additional mailing services for your tax return. For example, a return receipt lets you know who signed for the delivery of your return while the Certified Mail Service confirms delivery and who signed for it. A Certificate of Mailing Service gives you proof that put your return in the mail on time.

Postmarked by 11:59 pm

As long as your return is postmarked by 11:59 pm on April 15, you do not need to worry about how fast your return arrives. While you can choose to send your return with expedited delivery (and get a tracking number too), it is okay if you choose to let your documents make their way using the standard delivery schedule. As long as your postmark is before the cutoff time, your return isn’t late if it takes several days to reach its destination.

Ultimately, if you plan to mail a paper return on tax day, it is wise to contact your post office and confirm their hours. Additionally, consider some of the extra services that allow you to prove you were on time. That way, if your tax return gets lost in the mail, you have proof and can avoid any costly penalties.

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How to Use Alexa to Help with Your Taxes

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Alexa is getting more and more helpful. She seems to understand our language a little bit better each and every day. You can do so much more than just say, “Alexa, turn on the lights.” Of course, it’s still kind of fun to ask Alexa to tell you a joke.

However, you can use the tool for much more important things. For example, you can use Alexa to help with your taxes. She won’t do your taxes for you, yet. However, she can assist you with specific aspects of dealing with your taxes. You just need to know what to enable to make Alexa work for you.

Find Out When Tax Day Is

You have to file your taxes by April 15th each year. There are exceptions when the 15th falls on the weekend, which isn’t the case this year and won’t be again for several years to come. Nevertheless, if you can’t ever remember exactly when taxes are due, Alexa can help. Enable Tax Day in the skills section of the Alexa app. Then you can ask, “Alexa, when is Tax Day?”

Income Tax Finder

If you are wondering what your state income tax rates are, then you can ask Alexa by enabling this skill. You provide it with your state, year, filing status, and income. Alexa responds with your income tax rate. This gives you a good idea of approximately what you can expect to pay in taxes this year. Of course, you still have to do your taxes to find out exactly what you owe, but this is a good starting point.

Alexa is a Calculator

You have to do a lot of math when you’re filing your taxes. Why not let Alexa do that for you? You can ask her basic math information without enabling any special skills. Alternatively, you can enable My Calculator to supplement her basic knowledge.

Although it’s helpful to use Alexa to do the math for you, you might want to double-check her work before you file. After all, Alexa is getting better at understanding us but she still sometimes seems to hear something completely different from what we said. “But Alexa said so,” is probably not going to be a good excuse if you mess up the math on your taxes.

Tax Tips with Tyler McBroom

Enable this skill to receive a series of tax tips from a professional CPA. While it doesn’t allow you to ask specific questions and receive an answer, it does provide lots of helpful information. Once enabled, you can say, “Alexa, what’s my Flash Briefing?” That will launch your helpful tax tips session. This is also just a great way to bone up on tax information throughout the year.

IRS Help and Tax News

If you enable this skill, you can have Alexa update you with the latest news about the IRS, taxes, and related financial issues. The information comes from CNN’s RSS feed. As tax date nears, they publish many interesting articles that can be helpful as you prep your own taxes.

IRS Facts

“Alexa, tell me an IRS fact.” If you have enabled this skill, then you’ll have the opportunity to hear a series of random facts about the IRS. The truth is that this might not help you with your taxes in any practical way. However, you can use it to lighten the mood so that you don’t get overly stressed as you work on your taxes. Schedule period breaks as you work to ask for IRS facts. You might even ask Alexa to set a timer to remind you to take that IRS Facts break.

Check Your Refund with TurboTax Skill for Amazon Alexa

If you filed your taxes with TurboTax you can ask Alexa questions about when you will get your refund. First, you’ll have to enable TurboTax in the skills section of the Alexa app. Then you’ll have to enter your TurboTax user ID and password and create a four-digit personal key. Then, you can ask Alexa questions about your tax refund.

You might say, “Alexa, ask TurboTax when I will get my refund.” Alternatively, you can ask about the amount of the refund.

If you want to play with Alexa a little bit, then ask her, “how should I spend my tax refund?”

Get Ready for Next Year

Hopefully someday Alexa will actually be able to provide significant help with doing your taxes. Right now she can just do the above basic things. However, there are some great skills that you can use throughout the year to make your tax filing go more smoothly.

Daily Expense Skill

This tool helps you track your business expenses so that you have them organized in one place. This is helpful for budgeting throughout the year. You can receive a daily, weekly, and monthly report. Then, come tax time, you have all of your potential deduction information in one place.

If you try this skill and it doesn’t work for you for any reason, there are several other expense trackers that you can try. Track Expenses, Track My Expenses, Expense Manager, and Welto are each worth checking out. Find the one that works best for you then stick with it to make next year’s taxes easier.

Charity Navigator

Donating to charity is a great thing to do. It may also help reduce your taxes. Enable Charity Navigator in Alexa. Then, throughout the year, say, “Alexa, I want to donate.” There are more than two dozen charities listed in this tool so you can easily donate to a cause that you care about.

Prudential

If you use Prudential for your retirement accounts you can do a lot with those accounts by enabling their skill via Alexa. Your retirement accounts play an important role in your income taxes, so staying on top of this throughout the year is beneficial when tax time comes around.

You might also like to enable the One Minute Retirement Tip with Ashley to get tips about retirement throughout the year.

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