“The good Lord giveth and Uncle Sam taketh away” is how folk singer Pokey Lafarge put it, and with the deadline to file federal income taxes looming, the Internal Revenue Service says it has seen a decline in people filing early and estimated nearly one in 10 filers will request an extension.
The deadline to file is midnight Monday, April 15, and for those feeling overwhelmed, tax professionals like Kelly Dye at American Way Tax and Accounting in Hillsboro say to just take a deep breath and get the necessary paperwork together.
“We can help you file a tax extension to give you some breathing room,” she said. “The extension is good until Oct. 15 and up till then, you’ll need to gather up your W-2s, 1099’s, the health insurance 1095 form, and because of a change last year here in Ohio, you’ll need your driver’s license for security purposes.”
She said if a person intends to itemize, they would need to bring in documentation proving eligible deductions such as medical bills, real estate taxes, charitable donations, mortgage interest, and state and local taxes withheld as shown on their W-2s.
There have been many changes in the tax laws since last year, according to Jackie Massey of H & R Block in Greenfield, such as an increase in the standard deduction for married couples filing a joint return to $24,400, and for individuals or those married filing separately the deduction is $12,200.
“The government took off the table unreimbursed employee business expenses, which was a huge deduction for a lot of people,” she said. “Also, the state and local tax section is limited to $10,000, so if they’re a higher bracketed income person, they won’t get to deduct all of their state and local real estate taxes.”
Another big change was the elimination of form 1095, which taxpayers had to use to prove they had health insurance as part of the Affordable Care Act, or “ObamaCare,” but beginning in 2019, the Trump-led Tax Cuts and Jobs Act repealed the individual mandate, which means taxpayers won’t be required to file the form with next year’s return.
Dye said that about 95 percent of her company’s clients aren’t able to itemize their taxes because they don’t have enough deductions to exceed the increased standard deduction.
Though there are some who will procrastinate because they owe the government money, Massey said they should go ahead and file their tax return.
“If they think they can pay within 120 days, they can get a 120-day extension on making the payment,” she said. “If it looks like they won’t have it paid within that 120-day window, they should set up an installment plan with the IRS.”
Charles Colliver, lead clerk at the Hillsboro Post Office, advised against an 11th hour attempt at dropping off a return, since with the office closing at 5 p.m. Monday, anything mailed after that time will have an April 16 postmark.
The worst thing any taxpayer can do is to “blow it off” and walk away from filing a tax return, Massey said.
“Everything that is reported to the taxpayer is also reported to the IRS,” she said. “Typically, it may take the IRS a year or two to catch up with you, but one day you’ll get this nice little bill in the mail as though you were single with no exemptions or dependents, and it will be a big bill, believe me.”
She said that at this late day of the tax year, beware of scam artists who will prey on taxpayer insecurity and panic, and that in her estimation 98.9 percent of phone calls received by taxpayers are scams. She advised to never give out any personal information, no matter how threatening or legitimate a caller may sound.
Reach Tim Colliver at 937-402-2571.