The initial deadline to file individual tax returns this year is April 18, 2017 and it’s important that you stay proactive! LGA’s trusted tax experts are here to help you navigate your way through this tax filing season. Here is some useful information as the tax filing deadline approaches:
1. Embrace Extensions
A common misconception around this time of year is that the request for an extension to file your income tax returns increases the risk of an IRS or state audit. Most IRS and state tax notices are issued due to the omission of reportable items that the IRS or various state agencies are already aware of. The filing of an extension often reduces the risk of such notices or audits as there is more adequate time to ensure that the information being reported on the tax returns is complete and accurate.
Though the initial deadline for federal tax returns is April 18th, it’s never too early to start thinking about extensions. An extension is a form filed with the IRS to request additional time to file your federal tax return. The extension period is six months, which extends the due date for submitting your final return from April 18th to October 15th. In some states, filing an extension with the IRS will automatically extend the time to complete a state income tax return as well.
Filing an extension grants you additional time to submit your complete and accurate return. However, you still need to estimate whether you will owe any taxes and pay that estimated balance by April 18th.
2. Stop Tax Identity Theft in Its Tracks
Imagine after sending in your annual tax return, you receive a notice from the Internal Revenue Service saying that another return has already been filed using your name and Social Security number—and claiming a refund? Sound impossible? It can happen if you become one of a growing number of victims of tax identity theft. According to one estimate, tax-related identity theft cases have soared more than 650% since 2008. At the very least, this crime can lead to a delay in your refund, but the consequences may be much more severe. Also, you may face a larger problem with identity theft if the scammer is also running up credit card debt or taking out loans in your name.
To avoid becoming a victim, we recommend steps such as safeguarding your Social Security number and other financial information, keeping an eye on changes to your credit ratings and credit card bills, and taking precautions with electronic transfers of confidential information.
3. Don’t Be Taken in by Phony IRS Requests
The phone rings. The caller says they are from the Internal Revenue Service and they claim you owe taxes and must immediately submit payment through a wire transfer or prepaid debit card. Or you receive an email supposedly from the IRS asking you to share your bank account, credit card or Social Security number. Often, potential victims may see a fake caller ID that identifies the call as coming from the IRS or receives mail or email that appears to have the IRS letterhead that resembles the IRS website, like this https://www.irs.gov/pub/irs-utl/phishing_email2.pdf. The scammers typically try to intimidate victims into acting quickly—by convincing them to send a payment to what they claim is an IRS address, or by threatening arrest or some other consequence.
If you receive a suspicious communication purportedly from the IRS, we urge you to call us immediately at 781-569-4700. We can help you identify a bogus request for information and work with you to notify a legitimate IRS contact. You can also call the IRS directly at 800-829-1040 to verify any communication you receive.
Have Questions? We’re Here All Year!
Many clients see their CPAs at tax time when the primary focus is on completing and filing their tax return. As a result, they may not take the opportunity to ask questions about long-term tax planning or other important financial concerns. The good news is that LGA is available to you all year with extensive expertise in a broad range of financial areas. Give us a call to discuss your important financial issues whenever they arise.
