Frequently Asked Questions for TY2019
As we get ready to file your 2019 taxes, we compiled a list of our most frequently asked questions and debunking some myths when it comes to tax season.
Q1: Does the extension to file also extend the date my tax payment is due?
A1: No. An extension allows you extra time to file. Estimated tax payments are due on Tax Day, regardless of extension. If you expect to owe, 90% of the estimated tax owed must be paid by April 15th to avoid the Failure to Pay penalty.
Q2: Are you more likely to be audited after filing an extension?
A2: No, the IRS prefers you file an extension to ensure your return is accurate versus filing by the deadline with errors and having to amend. Accuracy is also important to us and, in order to do so, an extension is necessary.
Q3: How do I make an estimated tax payment for my 2019 taxes before April 15, 2020?
A3: We recommend making the payment directly through the IRS website to avoid e-file system outages and errors. A payment can be made to the IRS by visiting their website: www.irs.gov/payments
Choose the Direct Pay with Bank. (For credit card payments, additional processing fees apply) Choose Make a Payment
Reason for Payment: Estimated Tax
Apply Payment To: 1040ES
Tax Period for Payment: 2019
Verification steps: Refer to your previous year's tax return and the information entered must match exactly as the return when you filed with the IRS. If you moved, use the address you have on the filed tax return. Also, if you filed your street ·Ave· vs ·Avenue·; for IRS verification purposes use 'Ave.'
Here is a helpful video:
Q4: When is the deadline for IRA contribution & Self-Employed Pension (SEP) IRA Contribution?
A4: For IRA contributions it is tax day April 15th. SEP contributions are due on April 15th or October 15th (if an extension was filed).
Q5: What are the IRA & SEP IRA contribution limits?
A5: The Traditional & ROTH IRA limit is $6,000 ($7,000 if you're age 50 or older). SEP IRA limits are calculated using the lower of $56,000 or:
20% Income subject to Self-Employment Tax
25% of W-2 wages for S-Corp Officers