Tax Day tips and facts to avoid tax debt

It’s Tax Day: fun facts and practical advice

Unfortunately for your employer, Tax Day isn’t a federal holiday. But it might as well be.

A new survey of 463 working adults from staffing firm Accountemps shows nearly a third of us think it’s common for people to use company resources to do their taxes. That includes office ink, paper — and on-the-clock hours.

But just how taxing on your time is tax time?  It takes more than a work day to figure and file, according to MyCorporation, a company that helps launch small businesses.

Tax Day tips and facts.

Hopefully you’ve already logged some of that tax time. If not, you’ll be most interested in the first of the Tax Day tips and facts below…

1. An extension applies to paperwork, not the bill

You can get a six-month extension to file your taxes. The IRS explains how here.

It doesn’t get you off the hook for unpaid taxes, though. So if you owe Uncle Sam — and let’s face it, if you put off filing this long, it’s probably because you don’t expect a refund — you should pay what you can now.

(If you overpay, you’ll be able to mention that when you do file the paperwork, and you’ll get a refund.)

If you haven’t paid in full by today’s deadline, you’ll be hit with interest charges on the unpaid amount (3 percent per year, compounded daily) and a late payment penalty of 0.5 percent for each month you wait. So if you owe $1,000 and fail to pay anything until Oct. 15, you’ll owe an extra $60 or so.

Still, that’s far better than not filing for an extension and not paying. In that case, you’ll get hit with a penalty of 5 percent per month. That would add another $300 to the bill by Oct. 15.

2. Millions of Americans can get their taxes done for free

If you make less than $52,000 per year, you might qualify for free tax preparation through an IRS program called Volunteer Income Tax Assistance. (It’s obviously too late now, but worth knowing for next time.) The only catch is you have to go in person, but you can search for an IRS-certified tax helper by zip code right here.

If your household income is below $58,000, you also have the Free File option. That means you can use name-brand tax software to file your taxes online for free. More than a dozen companies ranging from TurboTax to FileYourTaxes.com participate, although income and state restrictions vary.

If you’re over 60, you can get some free tax help from another IRS program called Tax Counseling for the Elderly. Through TCE, organizations like AARP offer tax preparation and help with confusing tax questions.

Tax Day tips and facts.

3. Only 1-in-5 Americans knows where their tax money is spent

Spending a tax refund is easy. But most of us don’t know much about the money we give to Uncle Sam. In fact, as we recently wrote, only 20 percent of Americans claim to know what taxes are spent on. It’s no big secret: Here are the top five categories in the federal budget, according to the White House…

  • Health care — 25.19 percent
  • National Defense — 24.79 percent
  • Job and Family Security — 18.77 percent
  • Net Interest — 8.64 percent
  • Veterans Benefits — 5.44 percent

4. Refunds are bigger and more common than last year

The IRS has its own interesting tax facts, too. Last week, the agency revealed…

  • The average refund is up to $2,792 from $2,755 a year ago.
  • About one million more people than last year will get a refund, too: 78.8 million.
  • The IRS gets about a month’s worth of tax returns in the last few days before deadline. Almost 35 million people file between April 10 and April 15, compared to about 100 million between the start of the year to April 10.
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