Top 5 IRS Filing Taboos

For most of us, filing personal taxes - or any tax return for that matter - is a crucial ordeal. We understand the ramifications of not filing or filing late, and we usually choose not to get on the IRS bad side.

It’s one thing to make a common filing error accidentally, but it’s an entirely different situation when you intentionally report incorrect or omit information.

Committing such actions leads to an IRS audit, severe fines, or even worse - litigation and jail time. Here are some of the top tax filing taboos you should avoid at all costs.

Failure to Report All Earned Income
For employees, you typically receive an IRS Form W-2 which lists your earned income and you attach it with your IRS Form 1040. But for independent contractors, you receive an IRS Form 1099-MISC if you been paid more than $600 from any one employer.

The amounts you report on your tax return must match what is on your W-2/1099. And you’re responsible for listing your earned income - even if you have multiple jobs or if you don’t receive an information return from your employer. The IRS also gets copies of your W-2/1099 from your employer; therefore, they already know what your return should report.

Failure to Report Passive Income
For those of you who are investors, income that’s brought in through investments is known as unearned income - you must also report these amounts. You should get an IRS Form 1099-DIV or 1099-INT statement from your broker, banker, or mutual funds. The IRS also gets a copy as well, so like earned income, they already know what you should be reporting.

Embellishing Tax Deductions
We all know that tax deductions can significantly lower your tax bill, and in some cases, increase your tax refund. Because of that fact, some become tempted to inflate the amounts they claim. The IRS uses a Discriminant Information Function (DIF) that confirms the average deduction amount for various levels of income.

If your claims cross the threshold of a particular income level, your filing could get pulled for review. Substantial documentation is essential if you ever need to prove filing information or amounts to the IRS.

Exaggerating Self-Employment Costs
Like tax deductions, business expenses for sole proprietors can lower taxable income on their personal tax returns. Small business costs typically range from supplies and advertising to meals and entertainment. If expenses are vastly greater than the business’ revenue, that could initiate further examination.

Improper Claim of Dependents
With the child tax credit, taxpayers usually receive a $1,000 deduction for each child under 17 they claim - you can picture how this gets exploited quickly. It’s often difficult to determine the eligible tax dependent in a genuine situation based on IRS rules regarding relationships and support earned. But creating false dependents is detected quickly by checking which names correctly show up in prior returns.

It’s critical to report information on your tax return as accurate as possible. If you have any questions about your tax situation, we strongly recommend consulting with a tax professional before filing with the IRS. And if you need more time to file, you can e-file tax extensions quickly and securely with

Our first-rate U.S. - based, customer service team is ready to assist or answer any questions about e-filing extensions for business, personal, or tax-exempt returns. Call us at 803.514.5155, Monday through Friday from 9 a.m. to 6 p.m. EST or send us an email message with

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5 Simple Ways to Prepare for Tax Season

The year is quickly coming to an end, and the major IRS tax deadlines have passed, but that doesn’t mean you can slack on your tax preparation completely.

As soon as the new year starts, the entire process for filing taxes starts all over again. If you experienced a difficult time this past tax season, then here are five simple ways you can prepare better for next year.

Keep Detailed Records
It doesn’t matter if you usually file taxes on your own or with a tax professional - each situation requires proper records that are accurate. The more you become organized, the easier it’ll be to access the information you need to report to the IRS.

There are numerous software programs available that assist with tracking your bank statements, receipts, or invoices and create end-of-year reports. If you prefer keeping physical paper documents, choose a storing method that allows for easy catalog and accessibility - not a huge pile in a single folder or box.

Document Payments to Employees or Contractors
For businesses and tax-exempt groups with paid employees or contractors, it’s critical to be aware of the current tax rates when issuing paychecks - a tax consultant can help with any questions. If you’re responsible for filing 1099s and W-2s to the IRS, you can visit our sister site,, for cloud-based solutions to e-filing information returns directly with the IRS. You’ll also have access to copies of each tax form you transmit for the filing year.

Find Qualifying Tax Deductions
Claiming tax deductions can substantially lower your tax bill. There are numerous claims available for business and personal taxes. A tax professional or CPA can help go through your financial situations and find a few deductions you might not have known were accessible.

Consult with a Tax Professional
Sometimes you can be well prepared for tax season and still have issues with figuring out what it is the IRS is asking for exactly. It could be because of the legal jargon or confusion with categories and amounts. At times like these, we recommend seeking a tax professional for advice. It may not be free in some cases, but it’s better than filing inaccurate information and getting hit with IRS penalties.

E-file a Tax Extension
If you just can’t get things together to file on time, which is more common than you think with taxpayers, file an extension and receive more time to submit your tax return. With, we offer cloud-based technology for e-filing business, personal, and tax-exempt extensions.

Tax extensions are extremely helpful, but you have to remember to file by the extended due date. They can only increase the time you have to file your IRS form. If you owe any taxes, you are still accountable for paying in full by the original deadline.

Contact our U.S. - based, customer support for more information or help with transmitting tax extension to the IRS. You can reach us by phone at 803.514.5155, Monday through Friday from 9 a.m. to 6 p.m. EST or by email with

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IRS Filing and Payment Penalties

With the last of the IRS extension deadlines coming to an end soon, some of you are facing the reality of not being able to file on time. While filing late isn’t the best practice, getting your tax return filed as soon as possible after the deadline can lessen IRS penalties.

At this point, you’re probably wondering what those penalties will be since you may have no choice but to file late. They vary depending on which type of tax return you’re filing, and they group into failure-to-file and failure-to-pay penalties.

Failure To File
This type of penalty will occur if you file late or you eventually don’t file at all. For business and personal tax returns, neglecting to file on time can cost you 5% of your unpaid taxes each month or even part of a month your return is late.

The maximum penalty for these late returns can climb as high as 25% of your unpaid taxes. And if you’re more than two months late, the IRS can charge your remaining tax bill or a minimum $135 for each month you’re late - whichever amount is the least.

For tax-exempt organizations, the IRS charges a daily $20 fee each day your tax form is late. And for organizations with gross receipts over $1 million, the cost increases to $100 every day. The maximum penalty can reach a staggering $50,000 or 5% of your organization’s total revenue.

Failure to Pay
It doesn’t matter if you filed a tax extension, filed on time, filed late, or didn’t file at all - if you don’t pay your tax bill by the original deadline, the IRS can also charge a late payment penalty. For business and personal taxes, the cost is typically 0.5% of your unpaid tax amount each month your payment is late and can increase as high as 25% until you've paid all taxes.

Exempt organizations usually don’t have a tax amount to pay to the IRS hence being tax-exempt. But if your nonprofit or charity incur any excise taxes, you’ll have to pay those on time as well.

Tax Fact: If you file a tax extension and pay at least 90% of your tax bill by the original deadline, the IRS will allow until the end of your extended due date to pay the other 10% without penalties.

Double Penalties
It’s possible for the IRS to charge you both penalties for the same month. In such instances, the failure-to-file penalty gets reduced from 5% to 0.5% of unpaid taxes. There are ways for you to waive or contest against IRS penalties, but they require reasonable explanations why you filed or paid late - consult with a tax professional about your options.

Costs for filing or paying the IRS late can pile up quickly - tax extensions can alleviate the stress of penalties, but you have to remember to file before your extended deadline ends. Extensions only increase your time to file; you are still responsible for paying any tax amounts before the original IRS due date. At, you can pay tax liabilities while e-filing for an extension with our Electronic Funds Withdrawal option.

For any questions or assistance with e-filing extensions or paying tax amounts online, contact our U.S. - based support team at 803.514.5155, Monday through Friday from 9 a.m. to 6 p.m. or email us at

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Deadline for Personal Tax Returns Ends TODAY!

Time is quickly slipping away, and if you haven’t filed yet, you have until midnight local time to file your personal income tax returns without IRS penalties. Today’s due date is only for those who filed IRS Form 4868 for the original income tax due date back in April.

File to Avoid Penalties
Today is the only extended deadline for you all still filing income tax returns - no other extensions are available. If you fail to file on time, the IRS can charge you 5% of your unpaid taxes per month or part of the month your tax form is late. Maximum penalties can reach 25% of unpaid taxes, but being more than 60 days late leads to a minimum fee of $135 or the remainder of your tax bill balance.

Personal Tax Extensions
It’s never too early to start planning ahead for next year’s tax season. If you think of any reason at all that you can’t file before the original personal tax deadline, we recommend filing a tax extension as soon as possible.

With, you can e-file your personal tax extension within minutes and receive approval from the IRS almost instantly. E-filing with our service is made simple as possible, and you can get six extra months of filing time with these easy steps:
  1. 1. Create a FREE account at
  2. 2. Click “Create Personal Tax Extension”
  3. 3. Enter the required information for single or joint filing
  4. 4. Enter any tax amounts you owe if applicable
  5. 5. Choose your method of IRS payment if necessary
  6. 6. Authorize and transmit to the IRS

For even more convenience, e-file on the go or wherever you are with our FREE downloadable Express 4868 app for your favorite iOS or Android devices - keep all the simplicity, accurateness, and quickness of e-filing without being stuck at a desktop computer.

Contact our U.S. - based e-file experts, and we’ll be happy to answer any questions or assist you with the electronic filing process. We’re available Monday through Friday from 9 a.m. to 6 p.m. EST at 803.514.5155 or through email with

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IRS Deadlines Coming This Fall

The weather is finally cooling down with these final months of the year. But things can quickly heat up, especially if you still need to file your tax return to the IRS.

For those of you who filed extensions earlier this year, time is winding down submit your tax forms. Don’t forget about these extended IRS deadlines.

Extended Personal Tax Deadline: October 17
If you chose to file IRS Form 4868 back in April, your 6-month personal tax extension ends this upcoming Monday. There are no other time extending options after this deadline, so you either file on time or pay late fees. The extended due date for personal tax returns typically ends on October 15. Because that date is on a Saturday this year, you automatically have until the end of the following business day to file.

Penalties for Late Filing
You can guarantee IRS penalties for filing after the extended deadline. With personal income tax returns, you’re charged 5% of your tax bill for each month or part of the month your return is late. The maximum penalty is 25% of your tax amount, but if you’re more than two months late, the IRS charges a minimum fee of $135 or the remaining balance of your tax bill - whichever is the least amount.

Extended Tax-Exempt Organization Deadline: November 15
The second extended deadline for exempt organizations is a little over a month away, but the later you file, the more you’re risking late filing fees. This final due date may not apply to every nonprofit or charity - if your organization functions on a calendar tax year, and you filed IRS Form 8868 for both May and August deadlines, then November is your last chance to file on time.

Late Filing Penalties
Failing to file before the time limit leads to a daily charge of $20 each day your form is late - the cost increases to $100 per day for organizations with over $1 million in gross receipts. The maximum penalty is either $50,000 or 5% of total revenues.

Submitting an incomplete form is the same as filing late and can incur the same penalties. Visit our sister site,, where you can use cloud-based technology to complete and transmit IRS Form 990 or Form 990-EZ securely, accurately, and quickly than paper filing.

Tax extensions are extremely useful for those who need it, but its purpose is defeated - not to mention money and time wasted - if you still end up filing late. Whatever your reason is for filing an extension, you can e-file quickly and easily with Our service offers cloud-based support for business, personal, and exempt organization extension forms.

Our U.S. - based, customer support team is available Monday through Friday from 9 a.m. to 6 p.m. to assist you with the e-filing process - give us a call at 803.514.5155 or email us any time of the day with

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Deducting Relocation Expenses

The only other activity people probably find more loathing than filing taxes is moving from one place to another. Though it may vary individually, packing your entire home, lifting boxes and furniture, and then the unpacking isn’t quite thrilling.

But moving and filing taxes are a bit more related to each other than you think - especially if you’re relocating for employment. You can deduct your moving costs which can lower your tax liabilities. The IRS has a few guidelines for writing off expenses for moving.

Start of Employment
The best situation is to have a job already set up at your new location before leaving, but sometimes it isn’t quite that simple. The IRS allows up to a year from the time you moved to the time you start working to claim moving deductions. If it takes you over a year after relocating to secure employment, then it may be too late to report any moving costs.

Location of Job
You need the pass the IRS distance test to qualify for moving deductions. The distance from your old home to your new job has to be 50 miles more than the length from your old home to your previous job. So if you typically drove 10 miles from your old home to your old job, your new job needs to be at least 60 miles away from your old home.

Time Limit
There is also a time test for qualification. As stated earlier, you only have a year after moving to find employment. But within that year, you need to have worked full-time for at least 39 weeks at your new job - that’s nearly 10 months. If your tax return happens to be due sooner than the time test, you could still deduct based your expectancy to pass this requirement.

Important: You need to follow all three guidelines to deduct your relocation expenses. Check with a local tax professional to make sure you qualify. Eligible deductions include traveling and lodging costs during your move, the cost of shipping, storage, or insurance of property, costs for the connect/disconnect of utilities and more.

There are moving expenses that are non-deductible such as the cost of selling or buying a home or terminating or entering a lease. Because these write-offs depend on having a job, any expenses reimbursed by your employer are also non-deductible. If your move takes you across state lines, don’t forget to file the required state returns.

Get more time to have all your deductions in order by e-filing a personal tax extension with In minutes, you can transmit IRS Form 4868 and get approved for a 6-month extension to file your income tax return - conveniently e-file from your iOS or Android handset with our FREE downloadable app.

Our U.S. - based customer support is ready to assist you with your tax extensions - call us at 803.514.5155, Monday through Friday from 9 a.m. to 6 p.m. EST or email us day or night with

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Back-to-School Tax Credits

The Fall season is finally here, and much to the dismay of children and teens, school is back in session. But if you, your spouse, or any dependents are going to college this year, there are a few options available to cut down your tax bill.

We all know that education costs, but you can write-off some of those expenses from your taxes. Here are a few rules and credits from the IRS that you could take advantage around tax season.

Qualifying Educational Institutions
Schools that typically offer education beyond high school levels are eligible for tax deductions - these include your common vocational or post-secondary schools and accredited colleges or universities. You can confirm your school’s eligibility by asking the administration staff or searching through the U.S. Department of Education database of accreditation.

One Credit Per Student
The IRS imposes a limit of credits you can claim for each college student within your household, and each family can have a different situation. For example, if you’re claiming two or more students, you can’t write-off the same type of credit for both students - each one must be different for each student.

Deductible Expenses
Like many other tax deductions, the more you spend towards education, the more it subtracts from your owed tax amounts - these expenses are typically tuition, fees, and other related costs for qualifying students. Please check with the IRS for eligible expenses before racking up a tab - you might be surprised by which educational costs aren’t tax deductible.

Types of Education Tax Credits
The IRS only lists two types of tax credits for higher learning:
  • American Opportunity Tax Credit (AOTC) - A credit worth up to $2,500 per year; however, it’s only available during the first four years of any college career. Qualifiers can even get a max refund of $1,000 if they don’t owe any taxes.
  • Lifetime Learning Credit (LLC) - A tax credit you can qualify for no matter how many years you spend in secondary education. Qualifiers can receive a maximum of $2,000 back on their tax return.

Even though there are only two credits available, that doesn’t necessarily mean there aren’t any options for situations like non-residency or reduced income. Be sure to have a local tax professional take a look at your Form 1098-T tuition statement to identify any opportunities.

And don’t forget to visit to e-file a personal tax extension and get six months of extra time to file your income taxes. Download our FREE Express 4868 App for your iOS or Android device - e-file and get approved in minutes without even leaving your study session. Contact us with any questions at 803.514.5155, Monday through Friday from 9 a.m. to 6 p.m. EST or email us at your convenience with

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Tax-Free Income from Rental Property

The only thing better than getting a huge tax refund is earning money that isn’t taxable at all. One of the ways you can bring in non-taxable income is renting your home to out-of-town visitors.

Of course, there are tax rules you must follow to keep your rental income tax free. Here are a few regulations from the Internet to have in mind when renting your home to others.

14-Day Rental Lease
The biggest factor is the duration you have your home for rent - you want to think short-term here. You can only rent your home for less than two full weeks per year and not owe taxes on your income from the lease.

Even though two weeks worth of rent might not yield much money, in the long run, it’s still money that goes directly in your pocket tax-free. The amount refrains from your adjustable gross income, which keeps your taxable income low and that leads to a low tax bill.

Second Home Rentals
It only gets more complicated if you’re trying to rent out a second or vacation property. The 14-day rental rule still applies, but other factors can include
  • Renting your property to others for a limited time
  • Renting your property to others the majority of the year
  • Using the property yourself and then renting when vacant

Each of these factors yields unique tax implications on the income from your lease - even if you choose a random two weeks which you had tenants and decide to keep that payment tax free. Renting vacation property also has its separate requirements for tax advantages - consult your local tax professional for detailed information.

Rental Expense Deductions
Another way to cut your tax bill with rental property is by claiming tax credits on the costs of renting your home. Common rental expenses can include
  • Utilities
  • Insurance
  • Management
  • Advertisement
  • Cleaning & Maintenance

If your deductible rental expenses are more than your rental income, it’s possible for you to use the difference towards shrinking your tax bill even further - see a tax advisor for more.

Getting deductions in order during tax season can take extra time - not to mention factoring non-taxable income with your adjusted gross income; however, there’s no need to worry. With, you can e-file IRS Form 4868 and get approved for a 6-month filing extension.

Contact our U.S - based support team for any questions or help you may need with your e-filing experience. You can reach us at 803.514.5155, Monday through Friday from 9 a.m. to 6 p.m. EST. We also provide email assistance with

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Filing Income Tax in Multiple States

For many taxpayers, filing an income tax return with the State is as simple as transferring your federal information to your state’s return. It’s not as easy for others if you work in two separate states, or move from one state to another during the tax year.

In these situations, the law requires you to file with each state you received income. There are three types of tax returns you should be familiar with for filing with more than one state:

Resident Return
Just like the name implies - you file this return with the state where you reside. It taxes all of your income, no matter where you earned it. Each state has unique specifications for who qualifies as a resident for tax purposes. You can check your state’s tax authority website to confirm your qualifications.

Part-Year Resident Return
If you moved to a different state during the tax year, then you need to file this return twice - one goes to your former residential state, and the other is for the state where you currently live. A part-year return taxes your income only for the time you lived in a particular state.

For example, you lived and worked in Georgia for five months out the year, and then you permanently moved and worked in Virginia for the other seven months. You’ll file a part-year return with GA for the five months of income you earned and another with VA for the other seven months of income.

Non-Resident Return
The most basic scenario for this return is if you permanently live in one state, but your job location is across state lines. A great example is residing in Rock Hill, South Carolina, but driving daily to work in Charlotte, North Carolina. A non-resident return taxes income only in the state where it’s earned - in this case, that will be with NC. But you’ll also need to file a resident return with SC because that’s where you live.

Important: Tax situations can vary with many different combinations that may affect which state return you should file - double check with a local tax professional or advisor for the proper form for you.

State Extensions
Similar to federal e-filing, you can also file extensions for state returns. If you need more time to file multiple state returns, you’ll need to submit a separate extension with each state. Some states may require a formal request, while others may grant automatic extensions - check your state’s tax authority website for specific details.

With, we only support a handful of state extensions. While we transmit your federal extension to the IRS, we’ll also generate your state extension within your account - you can print it, fill it out, and then mail it. Tax filing deadlines may vary by state, so make sure you file your extension before the due date.

Contact our U.S. - based support team if you have any questions or need assistance e-filing federal extensions for business, personal, or exempt organization tax returns. We’re available at 803.514.5155, Monday through Friday from 9 a.m. to 6 p.m. EST and via email 24/7 with

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4 Autumn Tax Tips for Small Business Owners

The first day of Fall officially starts tomorrow, and as the weather cools down and the days gradually become shorter, we’ll all be at the end of the year before long. It’s typical for small business owners to wait until December or January to review their financial situations for the upcoming tax season.

But why wait - why not get a jump start right now and have an easier time filing later? You could improve your tax situation or even find ways to reduce your tax bill. Here are a few tax tips you should think about this season.

Become More Organized
Don’t get caught this tax season having to backtrack and dig through old receipts and financial statements. Only you know how hectic your holiday season and end of the year gets. By taking the time you have now to get organized, you can have your paperwork and information quickly accessible when you need it most.

Got Money? Spend It!
Now, this isn’t a pass to go crazy on unnecessary shopping sprees, but to strategically max out your deductions on business expenses. Look for any equipment that needs an upgrade or business operations, like advertising, which you could invest more into - pay out vendors instead of waiting until next year. If you can do it now, then take the advantage.

Pile Your Deductions

Along with general business expenses, you can also include travel, home office, or even entertainment expenses to deduct from your tax bill. Keep a detailed account on any activities that are strictly related to conducting business - you can even add your company’s upcoming holiday party to the list.

Lower End of Year Revenue
While this may go against every rule of progressive growth, the goal is to keep your tax bill as low as you’re willing to make it. Check for any accounts receivable as early as November, and see if it’s possible to defer payments until after the new year. That way, taxes from the late income are excluded from your tax liability for the filing year.

Always check with your local tax professional about your financial situation before changing your tax preparation. If the tax season arrives, and you happen to need more filing time, then see us at You won’t even need a desktop computer - download our FREE mobile apps and quickly e-file extensions for large or small organizations from your favorite iOS or Android device.

Contact our excellent customer support team at our Rock Hill, South Carolina, headquarters. We’re available at 803.514.5155, Monday through Friday from 9 a.m. to 6 p.m. EST or email us at your convenience with

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