Welcome to this special April 15 Monday Business Briefing from Insider Louisville.
For those of you who are still groggy from “Game of Thrones” viewing parties, Monday offers a double whammy: It’s Monday and it’s Tax Day.
If you need to “chill out” to make it through the day, Kona Ice of Louisville will be stationed at the Bluegrass Corporate Center from 1-3 p.m. to hand out free Hawaiian shaved ice. (Offers.com has a list of other freebies and discounts for Tax Day.)
But if you’re still up to your neck in paperwork, the local accounting firm Goforth & Herron (which playfully runs quotes on its website like “An income tax form is like a laundry list — either way, you lose your shirt,” -Fred Allen) offers a few serious last-minute tips, including:
- “Gather important documents. Make sure you have all the records you need, including W-2s and 1099s. Don’t forget to save a copy for your files.
- Double-check your math and verify all Social Security numbers. These are among the most common errors found on tax returns. Taking care will reduce your chance of hearing from the IRS. Submitting an error-free return will also speed up your tax refund.
- E-file for a faster tax refund. Taxpayers who e-file and choose direct deposit for their refunds, for example, will get their refunds in as few as 10 days. That compares to about six weeks for people who file a paper return and get a traditional paper check.
- Don’t Panic if You Can’t Pay. If you can’t immediately pay the taxes you owe, consider some stress-reducing alternatives. You can apply for an IRS installment agreement, suggesting your own monthly payment amount and due date, and getting a reduced late payment penalty rate. You also have options for charging your balance on a credit card. There is no IRS fee for credit card payments, but the processing companies charge a convenience fee. Electronic filers with a balance due can file early and authorize the government’s financial agent to take the money directly from their checking or savings account on the April due date, with no fee.
- Request an Extension of Time to File (but make sure you pay by the April 15 due date). If the clock runs out, you can get an automatic six-month extension bringing the filing date to October 15, 2019. However, the extension itself does not give you more time to pay any taxes due. You will owe interest on any amount not paid by the April deadline, plus a late payment penalty if you have not paid at least 90 percent of your total tax by that date.”
More taxpayers are opting to file electronically but if you need to file the old-fashioned way, the post office at 1420 Gardiner Lane is open until 9 p.m. with the last collection at 7, so get there before then if you want the April 15 postmark. The USPS offers some additional tax tips.
With major changes made by the Tax Cuts and Jobs Act, the IRS encourages tips and resources to visit IRS.gov/taxreform or check out the Get Ready page on IRS.gov.
According to The Wall Street Journal, so far about 1.2 million fewer filers are getting refunds this year — total refunds are down 2.6%, about $5.8 billion — with the average refund of $2,833, down $31 from 2018, according to the latest IRS data.
If you’ve already filed and didn’t get the refund you expected or had to pay more than you’d hope, The Motley Fool and others are reporting that there will be a new, more complicated withholding formula from the IRS. (The IRS offers a withholding calculator.)
“The IRS is planning to release a new W-4 form that does a better job of estimating how much tax to hold back from workers’ paychecks,” according to the Motley Fool. “And though getting that withholding just right will benefit workers, taxpayers should be warned that the new W-4 could be a far more complex version than its current counterpart.”
Ernst & Young noted that a draft would give employees the option of providing annual dollar amounts for:
- Additional nonwage income, such as interest and dividends
- Deductions from income for the household, such as itemized or other deductions
- Income tax credits expected for the tax year
- For employees with multiple jobs, total annual taxable wages for all lower-paying jobs in the employee’s household
H&R Block said customers who were disappointed with this year’s refund better address withholding now. “The refund trends from this year are set to be magnified for the 2019 tax year because the paycheck withholding calculations are in effect all year.”
“Failing to update a W-4 could mean that someone who had a refund drop this year could see their refund drop by even more next year: on average $200 more.”
In data through March 31, H&R Block found a 2.8% tax refund increase on average for its customers in Kentucky.
And finally, for some end of the day soothing music, the Bellarmine Music Department is presenting Tax Day Relief, featuring the Fauré and Duruflѐ Requiems performed by the Bellarmine Oratorio Society and the Schola Cantorum. The free program starts at 7 at Harvey Browne Presbyterian Church, 311 Browns Lane.