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☆ Here's what to do if you missed the federal tax deadline
▼ + stars: | 2024-04-23 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

The federal tax deadline was April 15 for most filers — and if you missed it, you should file your return and pay your balance as soon as possible, experts say. The late filing penalty is 5% of your unpaid balance per month or partial month, capped at 25% of your balance. Here's why it may work this timeHowever, that doesn't mean you should rush to file a return if you're still missing key information, like tax forms for your investments or other earnings. With missing information, the IRS could flag your tax return for audit, processing could be delayed or you could receive an agency notice. Of course, some filers in disaster areas automatically have more time to file federal returns and pay taxes owed.

Persons: Mark Steber, Jackson Hewitt, Biden, Steber Organizations: Finance, IRS

☆ 4 red flags for an IRS tax audit — and how to avoid the 'audit lottery,' according to tax pros
▼ + stars: | 2024-02-13 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +3 min

But everyday filers could still face an audit — and certain issues are more prone to IRS scrutiny, experts say. Audit rates of individual income tax returns decreased for all income levels from tax years 2010 to 2019, largely due to lower IRS funding, according to a report from the Government Accountability Office. Here are some of the biggest IRS audit red flags. Unreasonable tax breaksAnother red flag could be excessive deductions compared to what's considered normal for your income level, according to Losi. Earned income tax creditThe earned income tax credit, a tax break for low- to moderate-income workers, has historically been scrutinized "because the refundable part attracts certain bad actors," said Steber.

Persons: Ryan Losi, Mark Steber, Jackson Hewitt, Steber, what's, Losi, Erin Collins Organizations: Getty, IRS, Office, NEC, lotto, Center, filers Locations: Syracuse, U.S

☆ The average tax refund is almost 29% lower this tax season, according to early IRS data
▼ + stars: | 2024-02-12 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

"I caution anyone on reading too much into an entire year, or a tax season of 3½ months, on five days worth of data." Last year, the average refund for the 2023 filing season was $3,167, as of Dec. 29, according to the IRS. A lot of people who typically file early — such as earned income tax recipients and child tax credit recipients — still haven't filed, Steber said. By law, filers claiming the refundable portion of the child tax credit or earned income tax credit won't get refunds until Feb. 27 at the earliest, the IRS says. Why some tax refunds could be biggerTypically, you can expect a refund when you overpay taxes throughout the year.

Persons: Mark Steber, Jackson Hewitt, —, Steber, filers, Danny Werfel Organizations: IRS Locations: Congress

☆ Tax season kicks off. Here's how to get a faster refund and avoid ‘self-inflicted mistakes,’ expert says
▼ + stars: | 2024-01-29 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

Often, "self-inflicted mistakes" cause refund delays, according to Mark Steber, chief tax information officer at Jackson Hewitt. The IRS is planning for more than 146 million individual tax returns this season, and the deadline for most filers is April 15. Don't 'guesstimate' on your taxesTax return mistakes are another reason for delayed refunds. Some common tax return errors are "surprisingly simple," such as missing or inaccurate Social Security numbers, misspelled names, entering information wrong and math mistakes, according to the IRS. When to expect your tax refund

Persons: Mark Steber, Jackson Hewitt, Danny Werfel, Steber Organizations: IRS

☆ Inflation boosted the 2023 federal income tax brackets. Here's how your taxes may compare to 2022
▼ + stars: | 2023-03-06 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +3 min

Drakula & Co. | Moment | Getty ImagesAfter a year of soaring prices, the IRS made annual inflation adjustments for dozens of tax provisions, including the federal income tax brackets for 2023, which may affect next year's taxes, experts say. While the rates didn't change, the brackets show the federal income taxes you'll owe on each portion of your taxable income, which is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income. The goal of yearly inflation adjustments is to offset "tax rate bracket creep," he said, which happens when you owe more income taxes after wage increases without economic benefit due to inflation. How the 2023 federal income tax brackets changedThere was roughly a 7% change in the federal income tax brackets from 2022 to 2023, said Kyle Pomerleau, senior fellow and federal tax expert with the American Enterprise Institute. How to prepare for 2023 tax bracket changesWith tax law changes going into effect and others being proposed, 2023 may be "another year for the record books in terms of tax complexity and tax refund volatility," Steber said.

☆ Made a profit selling your home in 2022? Here's how to trim your tax bill
▼ + stars: | 2023-02-18 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +3 min

SDI ProductionsDespite the cooling market, many homeowners made money selling their property in 2022 — and part of that windfall may be taxable. While most sellers fall under the thresholds for capital gains taxes, high-dollar home sales or long-term ownership can trigger an unexpected bill, experts say. Here's how it works: Home sales profits are considered capital gains, with federal tax rates of 0%, 15% or 20%, depending on your 2022 taxable income. As a single home seller, you can exclude up to $250,000 of your profit from capital gains taxes and you can shield up to $500,000 as a married couple filing together, assuming you meet certain IRS rules. However, you may owe capital gains taxes if your home profit exceeds those thresholds.

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