Taxpayers made history today, April 17, 2018. In case you haven’t heard the story, taxpayers broke the Internet.
Well, that’s a slight exaggeration. However, after numerous technical difficulties, yesterday, the IRS had to issue another deadline date for filing. They did. They chose Wednesday, April 18, 2018.
The IRS reported, “There was a great deal of Internet activity and the “service that taxpayers use to file online was partly down throughout Tuesday morning and afternoon.”
The Original IRS Deadline to File Taxes Day was April 17, 2018
After hours of trying to repair computer glitches, the IRS made their announcement.
They stated, “Individuals and businesses with a filing or payment due date of April 17 will now have until midnight on Wednesday, April 18.” And they added, “Taxpayers do not need to do anything to receive this extra time.”
They also stated, “This is the busiest tax day of the year, and the IRS apologizes for the inconvenience this system issue caused for taxpayers.” They added, “The IRS appreciates everyone’s patience during this period. The extra time will help taxpayers affected by this situation.”
Taxpayers Wonder What Really Happened: A Day of Glitches, Hitches, and Fault-finding
David Kauter, IRS Commissioner, stated that the IRS website problems looked like they were in the “transmission” of tax
returns from software providers like H&R Block and TurboTax. Of course, this required a response from the companies
· You might not realize it, but Intuit owns both software companies. So Intuit stated that it was still fully processing the tax returns.
· In fact, the Intuit spokesperson stated, “Taxpayers should continue to prepare and file their taxes as normal with TurboTax.” And she added, “For those that prepared and filed their taxes with TurboTax earlier today, TurboTax is now submitting those returns to the IRS and is currently processing newly filed returns as normal.”
· H&R Block stated similar advice for the last minute tax-filing public: “While the IRS system is down, we are completing the returns, which will be sent as soon as the IRS system re-opens and will be considered filed on time.”
· H&R Block reassured their clients, “We are encouraging taxpayers to continue to use our retail services or our do-it-yourself products as they normally would.”
· So the storm of technical difficulty and the human storm of blame calling seems to have settled down as the day progressed, in the bright light of April 18.
Meanwhile, Taxpayers File for Extensions
At Gavrilov & Co, we have no doubt there was more to the story behind the scenes. To us, the chaos of yesterday simply emphasizes the need for every American Taxpayers to understand the value of working with a properly accredited tax accounting professional.
Unless you are living a very basic life, or are very young, DYI accounting really is a scary way to do your taxes in today’s complex financial world.
Taxpayers Note: Tuesday Was Also the Last Day to File for Automatic 6 Month Extension
Previously, we knew Tuesday was the last day for Americans to file their tax returns unless they filed for an automatic six-month extension.
Taxpayer’s Note for Small Businesses:
We heard some small businesses were rushing to put in requests for a 30-day extension. That is an extension for filing, not paying. It was designed for tax filers who need additional time to comply with their filing obligation. For instructions in this situation, check out the clear instructions at this reliable online resource:
When Midnight Comes April 18, 2018: Don’t Be A Taxpayer Cinderella!
At the stroke of midnight, the deadline for tax filing expires. (…if all goes well today.) So, what if you still do not file your income tax? What if you get caught in the midnight bell? Let’s look at a brief review of the consequences if a taxpayer does not file on time.
- Taxpayers could be hit with big penalties fat and interest if they still owe money to the IRS.
- As we have blogged previously, if the government owes you a refund, there is no penalty for filing late.
- But we hope you used a tax professional because if you are incorrect about that refund, you could be liable for punitive charges.
- If you need more time, you may request an automatic six-month extension to file y
our return. However, penalties and interest may apply to money you owe.
our return. However, penalties and interest may apply to money you owe.Some Cold, Hard Facts and Figures for Taxpayers Who Do Not File On Time
1. You will pay a late filing penalty of 5% of your unpaid tax bill every month for 5 months, stopping at 25%. Ouch!
2. The late filing penalty amounts to 5% of your unpaid tax every month or part of a month that it goes unpaid. That charge will accrue for up to 5 months, capping the penalty at 25% of the unpaid amount.
3. What if you’re over 60 days late? You’ll be subject to a minimum charge of $205 or 100% of the unpaid tax, whichever is less.
4. However, don’t expect them to use the minimum if the 5% per month you’ve been charged adds up to more than $205.
5. The current IRS interest rate is 5% per year, compounded daily. If you pay at least 90% of your taxes owed along with your extension, you won’t pay a penalty, but interest applies regardless.
The Calm in the Eye of the Storm:
By the end of the work day, yesterday at 5:05 p.m. ET, the IRS’ site appeared to be fully functional after being down much of Tuesday.
Treasury Secretary Steven Mnuchin reassured taxpayers. “We’ll make sure taxpayers have extensions once the system comes up to make sure they can use it, and it in no way impacts people paying their taxes.” Earlier, Mnuchin told the Associated Press. “It was just a technical issue we’re working through.”
At that time taxpayers found a major glitch when they accessed the tax agency’s Direct Pay system. Yes, ironically, that function controls direct deposit money transfers.
The Amazing Tax Time Surprise
Yesterday, when a taxpayer chose direct pay of their estimated tax bill, he or she accessed a message.
“This service is temporarily unavailable. We are working to resolve the issue. Please come back later and try again, or you can visit the Make a Payment page for alternative payment methods. We apologize for any inconvenience.”
Understand that the IRS website also explains it expects you to find a way to pay them. They state, “your tax payment is due although IRS Direct Pay may not be available.” So those looking to file should pay through the department’s other methods, which may include debit or credit cards and associated fees.
The tax agency issued a statement that acknowledged the problem. “Currently,
certain IRS systems are experiencing technical difficulties. Taxpayers should continue filing their tax returns as they normally would.”
As Midnight Nears…Our Terrific Take-Away
However, today, this system appears to be functioning fully and smoothly, as the clock ticks onward to the inevitable midnight deadline.
Gavrilov & Co reminds you, it’s definitely time to begin significant tax planning because this time of year will be coming around again sooner than you think. Don’t put off thinking about your tax strategy until deadlines are crashing in on you.
Unlike Cinderella, you could lose more than a shoe as the clock strikes 12:00 midnight.
Start planning for 2018 tax savings today.