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St. Louis Tax Law Blog

IRS posts new announcement about tax filing deadlines

The information disseminated by governmental agencies tends to change rapidly and sometimes daily. Right now, few things are certain, and many people are just trying to keep up, including many here in Missouri. What everyone knows is that the annual ritual of submitting income tax returns to the IRS is still on the lists of many people. The question now is what the deadlines are for filing and payment.

Just days ago, it was announced that taxpayers owing money could postpone their payments until July 15. However, they still needed to get their returns to the IRS by April 15 or file an extension to receive additional time in which to do so. Perhaps that decision caused enough confusion that those rules have changed once again.

Clearing up confusion on the IRS's latest grace period

In the midst of everything else that is currently going on in the country and across the globe, some aspects of life have to go on regardless. For instance, taxpayers here in Missouri and elsewhere have tax returns to attend to.

Recently, the Secretary of the Treasury, Steven Mnuchin, announced that taxpayers will receive some relief from that obligation. However, the news reports on the change have apparently caused some confusion that needs clarification before innocent people get into trouble with the IRS.

Taxpayers can once again take advantage of certain tax breaks

Most Missouri residents will take the opportunity to save money wherever they can, and this usually includes doing what they can to avoid sending a big check to the IRS each year. For this reason, some taxpayers may be glad to hear that they can once again take advantage of some tax breaks that had disappeared prior to the new tax laws. Congress even made these deductions and credits retroactive to the 2018 tax year.

Missouri homeowners can once again deduct their private mortgage loan insurance premiums, but this deduction is limited to their primary residence. Another credit homeowners may have the opportunity to take advantage of involves improvements made to their primary residence in order to make it more energy efficient. It may take some research to determine what improvements qualify for this credit.

Not everyone will get to keep their tax refund

If you have run the preliminary numbers for your 2019 taxes, you may have expected a sizable refund. Before you even file your income tax return, you may have thought of how you would spend that money.

Like other Missouri residents expecting a refund, you filed your taxes early in anticipation of seeing that deposit into your bank account. Unfortunately, it never came, and what you got instead was a letter indicating that your refund was seized to pay a debt you owe.

A public official can become embroiled in a tax controversy

The IRS does not care what position an individual here in Missouri or anywhere else in the country holds in society. If it suspects the individual of involvement in a tax controversy, the agency will pursue the matter. For instance, public officials are not above the law, and when authorities suspect them of wrongdoing, those officials could end up facing serious criminal charges.

A state representative on the East Coast was recently arrested on charges including tax fraud, bank fraud, wire fraud and illegal use of campaign funds. The 59-year-old public servant allegedly gambled his way into a significant amount of debt. He is accused of using campaign funds to cover those debts and personal expenses, such as gifts for a girlfriend, rental cars, hotels and more.

Eliminating some of the confusion over the EITC

Many would say that the earned income tax credit is one of the most beneficial and confusing credits in the U.S. Tax Code. Each year, a number of people who would otherwise qualify for this credit pass it by, even though it could save them a significant amount on their tax bill or provide them with a refund.

Part of the problem with eligible people not claiming this tax credit could be that doing so makes a taxpayer vulnerable to an audit. You see, claiming this tax credit does not require you to use any other government programs in order to qualify for it. Because of this, it is also one of the most often abused, and the IRS has cracked down on those who use it in recent years.

Let's clear up some misconceptions about state income taxes

While many people tend to focus on their federal income tax returns, many people will also need to pay attention to their state income taxes as well since Missouri is not one of the nine states that do not have income tax.

It may not surprise you that there are some misconceptions regarding state income taxes out there, especially since few people really pay attention to them since federal income tax returns usually offer the big refunds. If you fall into this category, then you may benefit from clearing up some of the myths surrounding your state income taxes.

Missouri man faces charges of tax evasion

The IRS often conducts investigations into individuals it believes have been less than honest with the agency. When taxpayers fail to file tax returns for a number of years, it tends to draw attention. This may be the primary reason why a Missouri man now faces charges, including obstructing the administration of tax laws and tax evasion.

According to the IRS, the man failed to file tax returns from 1996 to 2010. The charges focus more on tax years 2005 through 2010, however. The 57-year-old man also allegedly failed to make any tax payments during those years either. The amount he owes for the years included in the indictment is said to be approximately $639,333.

It's tax time again. Watch out for the "ghost" preparer scam

The IRS officially opened its doors for the 2019 tax season on Jan. 27. Like others here in Missouri, you may be gathering your documents and dreading figuring out whether you will have to pay or will get a refund this year. It's kind of like playing roulette since you never quite know how your taxes will turn out, especially with the drastic changes in the tax law that went into effect last year.

In order to make sure you minimize the amount of taxes you will pay or get the maximum refund possible, you may decide to have someone else prepare your taxes. While there are many reputable tax preparers out there, some are out to take advantage of unsuspecting people, such as you. Each year, the IRS warns people about these individuals and the different schemes they use.

The standard deduction will be hard to overcome

Like others across the country, St. Louis residents work to figure out how to save the most money possible on their taxes every year. Before the recent changes in the tax law, this meant looking for as many deductions as possible. However, after the recent changes, getting those deductions over the standard deduction could prove problematic for many people.

For the 2019 tax year, the standard deduction for single people is $12,200 and $24,400 for married couples filing jointly. It could be more for people with special circumstances, such as seniors or those claiming head of household. In each situation, the amount is higher than it was for the 2018 tax year.

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