OCTOBER 15th IS THE DEADLINE FOR FILING YOUR EXTENDED 2008 FORM 1040 (OR 1040A). IT IS VERY IMPORTANT THAT YOU GET YOUR RETURN IN THE MAIL SO THAT IT IS POSTMARKED BY OCTOBER 15th – EVEN IF YOU CANNOT PAY ALL OR ANY OF THE BALANCE DUE ON THE RETURN!
THE PENALTY FOR LATE FILING OF A RETURN IS 5% OF THE BALANCE DUE PER MONTH (FROM APRIL 15th TILL PAID). THE PENALTY FOR LATE PAYMENT IS ONLY .5% (1/2 OF 1%) OF THE BALANCE DUE PER MONTH (AGAIN, FROM APRIL 15th TILL PAID).
THE PENALTY FOR FILING LATE IS 10 TIMES AS MUCH AS THAT FOR ONLY PAYING LATE!
Not too much BUZZ this edition – tax pros have been busy working on the last of the GDEs.
* Kelly Phillips Erb starts off this Wed BUZZ with an “Ask the Tax Girl” entry. This one concerns “Reporting Dicey Income”.
The taxpayer posing the question explains - “I won a lot of money in my church’s 50/50. I know I have to report it as income but when I asked for written information from my church, they asked me not to report it. They say they aren’t legally allowed to run a 50/50 and if I report it, I’ll get them in trouble.”
As expected Kelly give the correct answer – “You’re absolutely right that you need to report the income”.
Hey, is the church going to pay the interest and penalties the taxpayer will be assessed if the IRS decides to audit the return and discovers the unreported income?
As Kelly points out in her answer – “Just report it on Line 21 as other income. The IRS asks you to describe the type and amount – it doesn’t actually require you to name the source.”
I have never come across a church or charity who told a winner not to report the money, but I do recall a church raffle where the wrong IRS form was filled out by the church to report the winnings.
* A certain multi-initialed blogger, who shall remain nameless so as not to give him any unnecessary attention, seems to take great glee in posting about “unenrolled” tax preparers who are convicted of tax fraud. Let me take great glee in reporting – “Oregon CPA Admits to Filing False Tax Return for Bookie”.
* Kudos to Russ Fox for joining me in opposition to the New York State law that requires tax preparers with absolutely no physical presence in NY to pay a fee in order to prepare NY tax returns via his post “Can New York Regulate Me?” at TAXABLE TALK.
For more on this issue you can check out my NJ TAX PRACTICE BLOG post “It’s the Principal of the Thing”.
* Trish McIntire has some words of wisdom for laid off W-2 employees who have turned to self-employment for income in “From W-2 to 1099Misc” at OUR TAXING TIMES.
* Check out the premier edition of T4 (Tax Tweet Third Tuesday) at DON’T MESS WITH TAXES!