BY PHIL GOLDSTEIN
Managing Partner, Goldstein, Lieberman & Co. LLC
A set of reminders for your 2017 individual return as the deadline nears:
The filing due date is April 17 this year because April 15 is on a Sunday and Washington, D.C., observes its Emancipation Day holiday on April 16.
There are a few ways to get a six-month extension if you need more time. File Form 4868 by April 17 and add a check if you expect to owe tax. You can either mail a paper form or go onto IRS’s Free File site to do it electronically.
Use IRS’s Direct Pay service and mark that the payment is for an extension or for a fee, charge an extension-related tax payment on your credit card or debit card through an IRS-approved processor. The extended due date is October 15, 2018.
If you are unable to pay the tax you owe, file your return or extension anyway to beat the 5% a month late filing levy. You can apply for an online payment agreement if you owe $50,000 or less in tax, penalties and interest, and you’ve filed all returns. Alternatively, use Form 9465 to set up an installment plan to pay your tax bill. Keep in mind IRS’s penalty waiver program for first-time offenders. The IRS won’t automatically abate the penalty taxpayers have to ask for this relief.
Your IRA contribution for 2017 is due by April 17. This date isn’t postponed by a six-month filing extension. Payments by mail must be postmarked by April 17, 2018. Make sure you tell your IRA custodian to apply the contribution to the 2017 year. The most you can contribute is $5,500…$6,500 for people age 50 and older in 2017. However, remember that you cannot pay in more than your 2017 earned income.
2017 returns of calendar-year regular C corporations are due April 17. If extra time is needed, these firms can request an automatic six-month extension by filing Form 7004 by that date and paying enough to cover any tax that may be due. Returns for calendar-year S corporations and partnership were due March 15.
The filing date for owners of overseas accounts is April 17. US taxpayers with foreign financial accounts whose total value exceeded $10,000 at any time in 2017 are required to electronically submit FinCen Form 114 to report the accounts. Filers who miss the deadline get an automatic six-month extension to file the form. Make sure that you comply with the reporting rules here. Battling offshore tax evasion is a priority for IRS, which devotes plenty in its arsenal to sniffing out non-reporters.
People with lots of financial assets overseas must also attach Form 8938 to their 1040s. Taxpayers filing jointly who live in the US must complete the form if the value of their foreign financial assets topped $100,000 on December 31 or $150,000 at any time during 2017. These thresholds are halved for singles and are much higher for filers who live abroad. Foreign financial assets include foreign investment assets, offshore bank accounts, foreign pensions and interests in foreign partnerships.
As always please consult your tax advisor should you have any questions.