Latest news with #MarkSteber
Yahoo
17-04-2025
- Business
- Yahoo
How do I apply for a tax-filing extension? What time are taxes due? Your last-minute Tax Day questions, answered.
Tax season is nearly done, which means last-minute filers are just beginning their sprint to submit their income-tax returns. Tuesday is Tax Day, the last day to pay any owed 2024 income taxes. It's also the final day to either file a tax return or claim an extension. Taxpayers have until 11:59 p.m. in their local time zone to file, according to Mark Steber, Jackson Hewitt's chief tax officer. Wall Street's 12 favorite stocks could soar as much as 54% over the next year, analysts say Americans are 'doom buying' coffee, olive oil and soap. What's the one thing I should stockpile to avoid tariff price hikes? The U.S. dollar's role as the de facto global reserve currency is looking increasingly uncertain Why this strategist is expecting a lost decade for U.S. stocks, even without a recession 'My house and car are paid off': I have $1 million in stocks — so where do I invest $100,000? 'I recommend taxpayers at least file an extension rather than miss the deadline altogether,' Steber said. Getting an extension ensures a filer won't face late-filing penalties, but if they have a balance due and don't pay at least 90% of their bill, they will face a penalty, he said. 'An extension doesn't give someone more time to pay, just more time to file,' he added. Americans have filed more than 100 million income-tax returns since late January, according to Internal Revenue Service statistics through early April. The tax collector is expecting to have more than 140 million income-tax returns once the dust settles after April 15. That would mean there are millions of people dashing to file their taxes right before the deadline. But an IRS deadline isn't just any deadline — there are pitfalls and penalties for people who move too fast or blow it off entirely. Here's what to know: Getting an extension buys people six more months to file their income-tax return. This sets an Oct. 15 deadline to submit the return, but it does not extend the deadline to pay a tax bill. The IRS says there are several ways to seek an extension, including requesting one through the IRS Free File program. Filers should estimate how much they owe and file the extension request by Tuesday to get the extra time. (Though the Free File program has an income limit of $84,000 for filing returns, there are no income rules for filing an extension through the site.) Another option is to use the IRS payment portal and click 'extension' as the payment reason; the IRS says it will send a confirmation, and extra forms don't have to be filed. Filers can also send in Form 4868 — the document seeking the extension — through the mail via a tax preparer or tax software. There's a chance a hard copy of doesn't reach the IRS by the Tuesday deadline. It's the postmark date that's crucial, according to Nerdwallet NRDS. Hold onto a proof of mailing for your records. 'When you submit that extension, make sure you also make a payment of what you expect to owe to avoid penalties and interest,' said Andy Phillips, vice president of the Tax Institute at H&R Block HRB. While some programs like IRS Free File allow people to request an extension for free, the cost can vary depending on the software, Phillips noted. Generally speaking, electronic filing is the fastest way to get through to the IRS instead of mailing paper forms. That's true for extension requests and income-tax returns overall. Some tax preparers have been moving quickly to request extensions this year or trying to avoid them altogether. The Trump administration is seeking to add to its already massive cuts to IRS staff, and these preparers want to avoid any delays in their clients' returns resulting from the agency's reduced capacity for operations and processing. That's especially true for clients mailing in hard-copy returns, they noted. 'We anticipate key operations will be stable through the remainder of tax season, but cannot predict staffing beyond the April 15 deadline,' Phillips said. It's especially important for people expecting a refund to file electronically this year, as that will be the fastest way to get the refund, he noted. Not everyone who needs more time for taxes needs to apply for an extension. The IRS routinely extends deadlines for people affected by natural disasters. After wildfires ravaged Los Angeles County in January, residents were given an Oct. 15 filing and payment deadline for their federal and state income taxes. The consequences of filing a tax return late are stiff — tougher, even, than those for failing to pay taxes. The failure-to-file penalty is 5% of the tax due 'for each month or partial month the return is late,' according to the IRS. The penalty builds by 5% each month to a maximum 25%. Getting an extension avoids the failure-to-file penalty. The nonpayment penalty is far less severe, at 0.5% of the unpaid tax. This penalty also increases as the unpaid tax drags out, but it doesn't escalate as quickly. It climbs by 0.5% increments each month. If someone skips filing and paying, both penalties apply, though the nonpayment penalty gets subtracted from the larger nonfiling penalty. Submitting the extension request by tomorrow helps people avoid the late-filing penalty, said Barbara Weltman, author of 'J.K. Lasser's 1001 Deductions & Tax Breaks 2025.' 'There's zero downside to filing an extension,' she said. At this point, people shouldn't rush to file a tax return without claiming all eligible credits and deductions — and gathering all the necessary documentation — just to make the April 15 deadline. For example, teachers should track down all their unreimbursed expenses for a deduction that's worth up to $300, along with receipts to back up the costs. Gig workers should hunt the records for their work-related expenses, which can produce deductions that lower taxable income. Investors should wait for all their tax forms reporting their gains and losses. In other words, file an extension and take the time to be complete and accurate, tax professionals say. One incentive to get your tax return right is the opportunity to maximize any refund you might receive. The average refund is now $3,116, according to the IRS, which is slightly higher than it was last year. Another incentive is avoiding notices of underreported income, dragged-out return processing and even the chance of an audit. As the Trump administration shrinks the IRS, it's unclear how much of the Biden-era plans to audit businesses and wealthy taxpayers remain. But the IRS has automated systems to check that people are reporting all the tax forms the agency receives too. These computer-powered checks aren't going away, and may take a bigger role in enforcement with a smaller IRS workforce. If someone filed their return and then realized they made a mistake or overlooked tax breaks or income, they can file an amended return. This is done with what's called Form 1040-X. The IRS will arrange repayment plans for people who cannot pay their full bill by Tuesday. There's a short-term plan under which the bill is fully paid in 180 days. There are also longer-term installment plans. Both plans can be started online, via phone or in person. The longer-term plan has some fees associated with the setup. 'Though interest and late-payment penalties continue to apply to the unpaid balance, the failure-to-pay tax penalty rate is cut in half while an installment agreement is in effect,' Phillips said. 'In addition, entering into an installment agreement will pause the IRS from taking other enforced collection actions.' People who owe taxes may still have ways to shave costs, which can help in a high-interest-rate economy. One maneuver is getting a loan to repay the IRS, Phillips said. 'In some cases, loan costs may be lower than the combination of interest and penalties the IRS must charge under federal law.' I begged my adviser to sell amid the market turmoil. He dragged his feet and I lost $20,000. Do I have any recourse? 'Are we out of our minds?' My husband and I are in our 70s. Should we use $600K of our savings to buy our dream home? S&P 500 tallies its first 'death cross' in 3 years. Here's what happens next. 'The whole thing feels predatory': My grandma, 97, pays $170 a month for a $10,000 life-insurance policy. Should we stop payments? I'm administrator of my sister's estate. Her bank won't tell me the names of her beneficiaries. Is that legal? Sign in to access your portfolio
Yahoo
15-04-2025
- Business
- Yahoo
Finish your 2024 tax return? Before filing it away, use it to plan for 2025 and save money
It's April 15, so you think you're done with taxes for another year? Not so fast. Before you put your tax documents into storage, use your 2024 return to help you plan for 2025 taxes next year, experts say. A little work now can put some money in your pocket and ensure filing goes smoothly on the next go round. 'Filing your taxes can feel like a beast. A lot of us put it off because it's confusing or stressful — and then we rush it, miss out on money, or skip it altogether,' said Carrie Joy, chief executive of WorkMoney. Because people "just finished their 2024 tax know in real time what they liked and did not like about their tax return experience, results and outcome and have time to make change for the next time," said Mark Steber, chief tax officer at Jackson Hewitt. To help ease the pain next year, experts said, consider taking some of the steps outlined below. If you owed money, look to see if there was a penalty for underpayment of estimated tax. If you ended up paying a penalty, think about increasing withholding or paying quarterly estimated tax payments to avoid it next time. If you had a large refund, consider reducing withholding. A refund basically is an interest free loan to the government. However, some taxpayers like large refunds to avoid bigger paychecks that will tempt them to spend more throughout the year. 'If you didn't have the tax outcome you were hoping for or had a life change like (you) got a new job, had a baby, or bought a house, it's time to review and possibly adjust your withholding from your paycheck,' said Lisa Greene-Lewis, spokesperson and certified public accountant for TurboTax. TurboTax has a free W-4 withholding calculator to figure out how much you should have withheld on each paycheck whether you want a bigger refund, or you want to assure you don't owe. If you set a withholding amount, know that you're not wed to it all year. "Most taxpayers can adjust their withholdings as often as they want to ensure their take-home pay and ultimately tax refund size best suits their individual needs, savings goals and tax return outcome results whatever they may be," Steber said. Look at your investments. If you sold some investments early in the year to lock in gains to avoid the stock market declines, consider selling losers to realize a loss to offset capital gains, said Richard Pon, certified public accountant in San Francisco. If you always make your IRA contribution after year-end in April, consider making your 2025 IRA contribution now. "With stock prices low today, you may be buying at the bottom instead of at a higher price next April," Pon said. Note: There's a bonus for some older adults this year. In 2025, for the first time, Americans ages 60 to 63 by the end of the calendar year have an opportunity to rev up their retirement savings with a supersized catch-up contribution that can help reduce taxable income on next year's taxes. If you have a business, don't forget to track business mileage throughout the entire year, experts said. If you are an employee, don't forget unreimbursed business expenses are still not tax deductible in 2025. Ask your employer if they can reimburse you for out-of-pocket expenses such as uniforms, small tools, professional subscriptions or business meals. Spring home buying season's starting. Keep in mind these related tax issues: If you sell your home, don't forget to document improvements to help you reduce any gains. Also, if you owned and used a home as your principal residence for 2 out of the last 5 years (through date of sale, not tax years), you're eligible for a $250,000 gain exclusion ($500,000 married). If you're buying a home, look out for state specific rules on housing deductions. The federal mortgage interest deduction is limited to $750,000. California mortgage interest is limited to $1 million plus $100,000 home equity indebtedness. If you move to North Carolina, the combined deduction for mortgage interest and property taxes is limited to $20,000 'To get organized for 2025 taxes, start in 2025 not in 2026,' Pon said. Anytime you make a tax-deductible expense, track it on a spreadsheet or simply put away the receipt in a folder, Pon said. The most common items are charitable contributions, property taxes and medical expenses. Ask your accountant if it's worth tracking medical expenses. For federal purposes, medical expenses must exceed 7.5% of adjusted gross income but certain states do not have this 7.5% floor. 'Organizing documents throughout the year helps ensure you don't miss any deductions when it comes to tax season,' Greene-Lewis said. She reminds families to keep receipts for items that may be deductible or that you may be able to receive a credit for such as a child's day care or summer camp. There are also education-related credits and deductions people can take, Joy said. For example, student loan interest is deductible, and the American opportunity tax credit is a credit for qualified education expenses paid for an eligible student for the first four years of higher education. 'Similarly, landlords should track their expenses during the year instead of gathering them next year when your memory may be a little forgetful,' Pon said. Create a folder for rental expenses such as insurance, management fees, homeowners' association fees, utilities and repair expenses. "It's easier to organize throughout the year than all at once," Steber said. "A lot of folks think they won't get much — but tax credits and deductions can lead to a big refund," Joy said. If tax season was confusing this year or you're new to filing, take some time to review important tax lingo so tax parlance becomes second nature. 'Understanding a few key words can go a long way,' Joy said. Once you know the lingo, you'll be more tax aware throughout the year and then, have a jumpstart when you file your next return. Refund - Money back from the government Deduction - Lowers how much of your income gets taxed (like student loan interest) Credit - Lowers how much you owe directly (like the Earned Income Tax Credit) Rebate - A special kind of refund or tax break Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday. This article originally appeared on USA TODAY: How to prepare for next year's tax season to save money Sign in to access your portfolio
USA Today
15-04-2025
- Business
- USA Today
Finish your 2024 tax return? Before filing it away, use it to plan for 2025 and save money
Finish your 2024 tax return? Before filing it away, use it to plan for 2025 and save money Show Caption Hide Caption Tax status changing? Here's what to know about filing this year Tax season gives many people anxiety. Here's what we know about filing this year. It's April 15, so you think you're done with taxes for another year? Not so fast. Before you put your tax documents into storage, use your 2024 return to help you plan for 2025 taxes next year, experts say. A little work now can put some money in your pocket and ensure filing goes smoothly on the next go round. 'Filing your taxes can feel like a beast. A lot of us put it off because it's confusing or stressful — and then we rush it, miss out on money, or skip it altogether,' said Carrie Joy, chief executive of WorkMoney. Because people "just finished their 2024 tax know in real time what they liked and did not like about their tax return experience, results and outcome and have time to make change for the next time," said Mark Steber, chief tax officer at Jackson Hewitt. To help ease the pain next year, experts said, consider taking some of the steps outlined below. Examine your payment or refund If you owed money, look to see if there was a penalty for underpayment of estimated tax. If you ended up paying a penalty, think about increasing withholding or paying quarterly estimated tax payments to avoid it next time. If you had a large refund, consider reducing withholding. A refund basically is an interest free loan to the government. However, some taxpayers like large refunds to avoid bigger paychecks that will tempt them to spend more throughout the year. 'If you didn't have the tax outcome you were hoping for or had a life change like (you) got a new job, had a baby, or bought a house, it's time to review and possibly adjust your withholding from your paycheck,' said Lisa Greene-Lewis, spokesperson and certified public accountant for TurboTax. TurboTax has a free W-4 withholding calculator to figure out how much you should have withheld on each paycheck whether you want a bigger refund, or you want to assure you don't owe. If you set a withholding amount, know that you're not wed to it all year. "Most taxpayers can adjust their withholdings as often as they want to ensure their take-home pay and ultimately tax refund size best suits their individual needs, savings goals and tax return outcome results whatever they may be," Steber said. Take advantage of the weak stock market Look at your investments. If you sold some investments early in the year to lock in gains to avoid the stock market declines, consider selling losers to realize a loss to offset capital gains, said Richard Pon, certified public accountant in San Francisco. If you always make your IRA contribution after year-end in April, consider making your 2025 IRA contribution now. "With stock prices low today, you may be buying at the bottom instead of at a higher price next April," Pon said. Note: There's a bonus for some older adults this year. In 2025, for the first time, Americans ages 60 to 63 by the end of the calendar year have an opportunity to rev up their retirement savings with a supersized catch-up contribution that can help reduce taxable income on next year's taxes. Business expenses for employees and owners If you have a business, don't forget to track business mileage throughout the entire year, experts said. If you are an employee, don't forget unreimbursed business expenses are still not tax deductible in 2025. Ask your employer if they can reimburse you for out-of-pocket expenses such as uniforms, small tools, professional subscriptions or business meals. Buying or selling a home? Spring home buying season's starting. Keep in mind these related tax issues: If you sell your home, don't forget to document improvements to help you reduce any gains. Also, if you owned and used a home as your principal residence for 2 out of the last 5 years (through date of sale, not tax years), you're eligible for a $250,000 gain exclusion ($500,000 married). If you're buying a home, look out for state specific rules on housing deductions. The federal mortgage interest deduction is limited to $750,000. California mortgage interest is limited to $1 million plus $100,000 home equity indebtedness. If you move to North Carolina, the combined deduction for mortgage interest and property taxes is limited to $20,000 Get organized 'To get organized for 2025 taxes, start in 2025 not in 2026,' Pon said. Anytime you make a tax-deductible expense, track it on a spreadsheet or simply put away the receipt in a folder, Pon said. The most common items are charitable contributions, property taxes and medical expenses. Ask your accountant if it's worth tracking medical expenses. For federal purposes, medical expenses must exceed 7.5% of adjusted gross income but certain states do not have this 7.5% floor. 'Organizing documents throughout the year helps ensure you don't miss any deductions when it comes to tax season,' Greene-Lewis said. She reminds families to keep receipts for items that may be deductible or that you may be able to receive a credit for such as a child's day care or summer camp. There are also education-related credits and deductions people can take, Joy said. For example, student loan interest is deductible, and the American opportunity tax credit is a credit for qualified education expenses paid for an eligible student for the first four years of higher education. 'Similarly, landlords should track their expenses during the year instead of gathering them next year when your memory may be a little forgetful,' Pon said. Create a folder for rental expenses such as insurance, management fees, homeowners' association fees, utilities and repair expenses. "It's easier to organize throughout the year than all at once," Steber said. "A lot of folks think they won't get much — but tax credits and deductions can lead to a big refund," Joy said. Speak the language If tax season was confusing this year or you're new to filing, take some time to review important tax lingo so tax parlance becomes second nature. 'Understanding a few key words can go a long way,' Joy said. Once you know the lingo, you'll be more tax aware throughout the year and then, have a jumpstart when you file your next return. Refund - Money back from the government Deduction - Lowers how much of your income gets taxed (like student loan interest) Credit - Lowers how much you owe directly (like the Earned Income Tax Credit) Rebate - A special kind of refund or tax break Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
Yahoo
07-04-2025
- Business
- Yahoo
Kids bring joy, chaos... and tax benefits. What to know as a new parent filing a return
If you welcomed a new baby, adopted a child, or became a stepparent in 2024, your tax return should look different this year. While you may be busy adjusting to life with your new family member, don't forget to file your tax return before the federal April 15 deadline. Experts advise taxpayers to file sooner rather than later to avoid mistakes. If new parents set aside time to research deductions and credits they may now qualify for, they can save hundreds if not thousands of dollars. 'One of the biggest life changes is new dependents,' said Mark Steber, senior vice president and chief tax officer at Jackson Hewitt. 'New parents in particular have a whole host of new considerations.' Between diaper changes, meal prepping, and doctors' visits, you've got your hands full. Here are some things to avoid getting lost in the shuffle: More: What is the average tax refund? Why yours might be lower or higher Make sure to keep track of your new dependent's social security number, adoption tax identification number or individual tax identification number. Confirming your child's birth is the only way the IRS can verify you are eligible to claim parental tax breaks. Once you have it, make sure it is entered correctly on your tax forms. Mistyping social security numbers is one of the simplest, yet most significant mistakes people make on their returns, according to TurboTax CPA and tax expert Lisa Greene-Lewis. There's a chance that a new dependent may bring a new tax filing status. If you were previously married filing jointly and had a child join your family in 2024, it will likely remain the same, but you and your spouse might expect more credits and deductions to be available to you. If you are legally single, experts advise you to change your filing status to head of household to maximize your benefits if you are eligible. Everyone's circumstances are different. If you're unsure of the best filing status for you, the IRS has a five-minute online survey to help you decide. Kids bring many things to parents' lives including love, chaos, and a whole new perspective, but tax experts agree they also bring something else important. 'Kids are worth valuable deductions,' Greene-Lewis said. In addition to higher thresholds for the standard deduction and the Earned Income Tax Credit, here are some credits you shouldn't miss out on, according to the IRS: The Child Tax Credit: Taxpayers can claim up to $2,000 for each qualifying dependent child when filing their return this year so long as they meet all eligibility factors and have an annual income under $200,000 or under $400,000 if filing a joint return. Child and Dependent Care Credit: If taxpayers paid for childcare or daycare expenses, they may qualify for this credit and claim up to 35% of those expenses so long as they are eligible. Adoption Tax Credit: Taxpayers may claim eligible adoption expenses for each eligible child if they went through the adoption process during 2024. It applies to international, domestic, private, and public foster care adoptions. After you file your return, make sure to fill out a new W-4 form with your employer reflecting that you now have a dependent. The change will likely lower your withholding and decrease your tax refund in 2026, but will increase the size of your paychecks going forward. Reach Rachel Barber at rbarber@ and follow her on X @rachelbarber_ This article originally appeared on USA TODAY: Tax tips and benefits every new parent should know Sign in to access your portfolio
USA Today
07-04-2025
- Business
- USA Today
Divorced, separated or widowed in 2024? How it will affect your tax return
Divorced, separated or widowed in 2024? How it will affect your tax return Show Caption Hide Caption Tax Day is coming up on April 15 — what to know about filing Tax Day is coming up on April 15. Here are some tips for making the process as smooth as possible. Many factors and life changes can affect your tax returns, and experts say becoming newly single is one of the most significant. If you were widowed, separated, or got divorced from your spouse in 2024, it's likely going to affect your tax return and refund. Though everyone's circumstances are different, experts advise it's usually a good time to sit down with a financial planner or tax professional, especially if dependents and shared assets are involved. 'The details matter. Keeping the records matter,' said Jackson Hewitt's senior vice president and chief tax officer Mark Steber. 'Dealing with a tax pro matters.' From a change in filing status to how to plan for next year, here are experts' tips for newly single taxpayers: More: What is the average tax refund? Why yours might be lower or higher Determine your new filing status If you're newly single, you're likely used to filing married jointly or filing married separately. Remember this date - Dec. 31, 2024. That's the date that matters. If you were legally married when the new year hit, your status options remain the same. However, if you were legally divorced or separated before 2025 hit, even if the paperwork was processed in December, they'll be different. You now have two options: filing single or as a head of household. The single filing status applies to anyone who is unmarried, divorced, or legally separated. But if you have children or dependents, you may want to file as a head of household. To file with this status, you'll need to prove you paid more than half of your living expenses for yourself and a qualifying dependent in 2024. 'If you have an eligible child in the home, filing as head of household is going to be more advantageous,' said Andy Phillips, vice president of the Tax Institute at H&R Block. 'Larger standard deduction, better tax rates, things like that.' If your spouse died during 2024, you can still file a married joint tax return in 2025. If your spouse died during the past two years and you have a dependent child, you can file as a qualifying surviving spouse. Figure out who claims dependents and credits For the best outcome, experts said it's ideal if exes work together to determine who will claim dependents and related credits on their tax return. In some cases, parents can split tax benefits using the custodial parent form 8342, but it's more common for one to claim them. This decision is often determined and spelled out in a divorce or separation agreement. If it is not, and exes cannot come to an agreement on their own, the IRS will have three questions for them to answer. 'The IRS got tired of being the negotiator in all of this and they now have a three-point test,' Steber said. 'It's pretty simple.' If the dependent is related to you, lived with you for more than half the year, and you provided more than 50% of their financial support, you'll get to claim them on your tax return. Plan for next year Phillips said one of the biggest mistakes people make when filing their taxes is not taking it as an opportunity to look forward and plan for the next year. 'If you put those tax documents away and move on, you're not going to come back to it,' he said. Steber agreed, adding that especially if you are going through a major life change, 'you don't want to just assume it's all going to work out' next Tax Day. If you're newly single, you'll want to ensure you are withholding enough to avoid owing the IRS next year. If you can afford it, you may decide to withhold an extra hundred dollars each pay period and sort it out later, Steber said. But he suggested having a tax professional run a tax projection which will help you know what to expect in 2026 and make changes accordingly. Reach Rachel Barber at rbarber@ and follow her on X @rachelbarber_
