If you’re scrambling to do your taxes this weekend, you’re not alone.
“There’s about 20 million people that traditionally do their taxes this week,” said Scott Smith, a CPA for Smith, Kunz and Associates, PLLC in Rexburg, Idaho. “Even those that get them done, there’s still one in five that have to do an extension.”
But, Americans have a little more breathing room this year. Tax Day won’t fall on the usual April 15th deadline and will instead, fall on April 18th.
“Washington D.C. has what they call Emancipation Day on the 16th, because that’s on Sunday this year, they have to recognize that on Monday, so it kicks us all over to Tuesday, the 18th.”
Still, Smith says there are two types of penalties to be aware of as people prepare their taxes: one for filing late and one for paying late.
Anyone who files late can be charged 5 percent per month of their tax bill. Taxpayers can avoid the late penalty by filing for an extension.
“We’ve already filed extensions for all of our clients that we haven’t been able to finish up yet or haven’t come in yet,” Smith said.
However, there is no extension for paying late, Smith says. The penalty for paying taxes after the deadline is .5 percent of the overall tax bill.
Taxpayers can avoid the late payment penalty by estimating their payment this year.
“As long as you pay about 90 percent of what you owed last year, you’ll generally be okay,” Smith said.
Many taxpayers are also struggling to know how to answer this year’s healthcare question. President Donald Trump signed an executive order earlier this year allowing Americans to leave healthcare questions blank on their taxes.
But, the penalty for not having health insurance as required under the Affordable Care Act, has not gone away.
“By leaving that answer blank, you’re just giving the IRS a roadmap to ask you a bunch of questions about your health insurance, which means you could still end up owning the penalty anyway” Smith said. “We’re just telling people to answer the question, avoid a letter down the road from the IRS and just get it done.”
Smith, Kunz and Associates, PLLC are still taking tax clients for the 2017 tax year.
Scott Smith is a CPA/PFS, CFP at Smith, Kunz and Associates, PLLC in Rexburg, Idaho. He has worked with Smith, Kunz and Associates, PLLC since 2011. Smith spoke with Neal Larson on KID Newsradio about this upcoming tax season, some pitfalls taxpayers can avoid and how Americans should approach answering healthcare questions this year.