Tax News Blog

Penalty, Consequences and Important Next Steps from Missing the Tax Extension Deadline

Posted by admin on September 21, 2023
Last modified: September 22, 2023

Do you need to catch up on the annual tax filing deadline? What are the penalty from missing the tax extension deadline, repercussions, and what should be done next? Tax Day is an expected event that occurs every year, generally on April 15. But even when you know it’s coming, making sure your income tax return is ready in time can be difficult.

Do you need more time to organize all of your income tax documents? Extensions can be the perfect tool to give you some extra days. In this article, we’ll explain the fundamentals so you can get everything sorted out for your return.

Penalty for Missing the Tax Deadline?

Failing to submit a tax return or extension by the specified deadline can result in the IRS imposing a failure-to-file penalty. This penalty is 5% of your total amount of unpaid taxes for every month (or partial month) that goes by without you filing. In extreme cases, this fee can reach as high as 25% of your total taxes owed.

Suppose you have an amount of $10,000 in taxes to pay. The IRS may impose a penalty of $500 per month should you fail to file your taxes on time.

Filing a late tax return without expecting to owe penalties may not incur a penalty from the IRS, but should you think that you might have to pay, consulting a tax professional is wise. In this situation, you will likely face interest and penalties as consequences of delayed filing.

tax extension deadline

Tax Extension Deadline for Filing 2022 Taxes

There are two key dates to consider when considering the tax extension deadline. April 18, 2023, is a date that all taxpayers should mark on their calendars – it’s both the original filing deadline as well as the deadline for submitting an extension request. By filing for an extension, you will have more time to complete your taxes, but any taxes owed still need to be paid by April 18.

The October 16, 2023, tax extension deadline is quickly approaching. But what would you do if you missed the April or October deadline? Can I get more time? To help make sure you’re well informed, contact your dedicated tax professional from PriorTax for free.

What will Happen Missing the Tax Extension Deadline?

Regarding punishment for not making the April tax filing and payment deadline, you may be subject to two different fees: the failure to file a penalty and the failure to pay the fee (in cases where money is owed). Fortunately, those who submitted an extension and followed through with their taxes by their extended deadline are exempt from the failure to file a penalty.

For those of you who let the October deadline come and go without filing, it will result in failure to file penalties that have taken effect as of the original filing date (generally October 15). This could also mean potential failure to pay penalties stretching back to April 15, typically the payment due date.

To help avoid accumulating additional fees or interest, filing a tax return as soon as the October 16, 2023 deadline passes is highly recommended. The sooner you submit it, the better to minimize any extra costs.

Getting Even More Time after the October Tax Extention Deadline?

The October 16, 2023, tax filing extension deadline is firm – no exceptions. So, for anyone who needs to file their taxes for the 2022 tax year, this is the final opportunity to do so without incurring failure to file interest and penalties Charges.

Do you need assistance paying your tax bill? The IRS offers a payment plan option, which allows you to break up the cost into smaller payments. Find your dedicted tax professional for free to learn more about on boarding on an installment agreement with the IRS and get the information you need to stay on top of your taxes.

Tax Installment Agreement

In the event that you are unable to pay your taxes all at once, there is a way to spread it out over time. An installment agreement with the IRS allows individuals to make payments on their tax debt in manageable increments. This type of plan also reduces the failure-to-pay penalty by half, though the IRS does require an administrative fee for establishing such an arrangement.

A successful installment agreement may be easily achieved through the IRS Online Payment Agreement tool, though some instances can require added proof of income and assets. When this is the case, the Internal Revenue Service will limit expenses to a level that is considered reasonable when determining how much can be afforded every month.

Request Your Prior Year Tax Refunds Today Before You Lose Them

Don’t let your tax refund slip away. Even though getting a refund after the due date is still possible, you want to make sure you get all the money.

You have a limited amount of time to request a refund from your tax return, as mandated by IRS regulations. Generally, it is three years from when your taxes are due; for instance, say you still need to file your 2022 return by April 18, 2023, then in 2026, you would no longer be eligible for any tax refunds. After this deadline has passed, it is considered that you have given up on claiming back what belongs to you, and instead, it goes to belonging to U.S. Treasury.

Even though you may not have a tax debt, the IRS still requires you to file a return. Missing documents from prior years can be obtained from your employer, bank, or other third-party sources such as an educational institution or loan provider. Get in touch with a dedicated tax professional from PriorTax for free to walk you through this process from start to finish.

October Tax Extension 2023

Posted by admin on September 14, 2023
Last modified: September 14, 2023

What You Need to Know Before the October 16 tax extension deadline. Tax extension could give you extra time for filing but not for paying. Make sure you file by the October 16th date to avoid any additional charges.

Prior to tax day, the IRS receives millions of extension requests by way of Form 4868. While this does give filers an additional six months to submit their 2022 return, that extra time doesn’t make paying taxes any easier. So be sure you’re still on top of your payment plan!

It’s important to note that even though you may have until October 15 to file your taxes, the payment is still due by April. To better understand how the tax extension deadline works and other related deadlines, here is more info to consider.

It’s no surprise that with tax day quickly approaching, many people struggle to get their paperwork together in time. Last year, the IRS reported that 19 million taxpayers had requested an extension for filing their income tax returns, and the number is expected to be similar this year.

With the October 16, 2023, deadline looming for filing your paperwork, you may have some reprieve from the pressure. Nevertheless, it is important to remember that this extension only gives additional time for filing – less time to pay. Therefore, estimate how much tax you owe and submit it as soon as possible in order to prevent extra fees and interest due to late payments.

October tax extension

What is a tax extension?

Do you need more time to file your federal income taxes? A tax extension may be the answer. When approved, a tax extension can help prevent penalties for late filing with the IRS.

Submitting Form 4868 to the IRS before April 18, 2023, provides an extension for filing taxes that year until October 16. Submitting a payment for any estimated taxes owed is important to avoid additional penalties and interest when requesting an extension. This can be done both online and by mail.

Which states have federal tax deadline extensions?

Due to FEMA-declared natural disasters, certain states have received deadline extensions for federal tax filing and payments. Specifically, this includes individuals’ income taxes, business taxes, and quarterly tax filings. So, what are the affected states?

The IRS has identified certain counties that have been affected by the disaster, and only those individuals living in and businesses established in these areas may be eligible for relief. Generally speaking, this requirement must be fulfilled in order to receive this assistance.

In the event that you were incapable of complying with the tax-filing deadline due to your preparer living in an area affected by disaster or documents for completion of your return being located in said region, You may be eligible for IRS-recognized relief. For more information, visit the IRS dedicated page on disaster aid.

  • Alabama (October 16, 2023)
  • California (October 16, 2023)
  • Georgia (October 16, 2023)
  • Hawaii (October 21, 2024)

Does the tax extension deadline apply to me?

Do the tax extension period apply to you? By submitting IRS Form 4868 before the original filing deadline, you are eligible for a six-month extension until October 16, 2023, to file your taxes. Even though extra time has been provided, paying at least 90% of any tax owed on or before the regular date is important. Otherwise, the IRS could punish you with late payment penalties and interest.

Did you miss the April 18 tax return deadline? You may face both failure-to-file and failure-to-pay penalties, plus interest from the IRS. Not filing for a tax extension before this date could mean your taxes are definitely delayed, according to the agency.

Have I already missed the deadline for the tax extension application?

After April 18, 2023, deadline for tax extension requests has passed and you still haven’t filed your taxes, the IRS advises that you do so as soon as possible in order to avoid penalties and interest that begin to accumulate right away. Furthermore, those struggling to pay their bill can consider various payment plans provided by the agency. There is even a chance of penalty abatement for first-time offenders who meet several criteria.

If I miss paying the taxes by the October tax extension deadline?

Failure to meet the October tax extension deadline comes with consequences. Should you miss it after requesting an extension, then the following will occur:

It’s expensive to delay paying your taxes. Even with a tax extension, the payment due date is April 18th – and interest accrues right away. That means allowing your taxes to go unpaid until October could cost an exorbitant extra fee.

Didn’t manage to meet the April deadline for paying your taxes this year? The IRS late-payment penalty may be higher than usual as a result. Generally, it can be anywhere from 0.5% to 25% of the monthly unpaid amount until the full sum is paid off.

The IRS may impose a late-filing penalty of 5% for every month or partial month your taxes are not submitted on time. This amount can accumulate as much as 25% of the overall amount due to them.

How to file a tax extension

Before the tax filing deadline, you can extend the time to file by submitting Form 4868 electronically or by mail. Alternatively, paying an estimate of what you owe to the IRS with your debit/credit card, IRS Direct Pay, or EFTPS and marking it as a payment for an extension will eliminate any paperwork.

Are you considering a tax extension? PriorTax can assist you from start to finish with filing Form 4868. Contact your dedicated tax professional and explore submitting the form online for free. Upon completing with our free dedicated tax professional, you will receive an email confirmation from PriorTax and the IRS.

Hawaii Announces Some Details on Wildfire Tax Relief Plan

Posted by admin on September 7, 2023
Last modified: September 8, 2023

Wildfire Victims May be Eligible for Hawaii Tax Relief

Taxpayers affected by the wildfire disasters in Hawaii counties may now receive various forms of Hawaii tax relief, according to an announcement from the state’s Department of Taxation (DOT). The DOT has released details about how those affected can take advantage of this tax relief, which this article will go through in detail.

Hawaii DOT will give special consideration on a case-by-case basis to those taxpayers adversely affected. This includes extensions for tax filing and paying various taxes, such as general excise (sales tax), transient accommodations, net income, tobacco, and liquor; waivers of penalties and interest; or any other form of assistance due to interruptions in mail delivery.

For those submitting their taxes via paper, write “2023 Wildfire Relief” on the top center of the return. Meanwhile, when filing electronically through Hawaii Tax Online, one must send a message selecting “I have a 2023 Wildfire Relief Question” in order to receive relief.

Those needing assistance due to the wildfire disaster should be sure to include a concise explanation when filing for tax relief. This statement should articulate what kind of help is requested and how the devastation has impacted their ability to meet tax obligations.

Individuals, businesses, and others can be considered “adversely affected taxpayers” when they cannot file tax returns or make payments due to the wildfire disaster.

The governor has declared certain areas to be disaster zones. Consequently, any funds from a property or casualty insurance policy resulting from the damage or loss of inventory utilized in a business within such an area are excused from General Excise Tax (GET).

For those affected by the Hawaii wildfires, there are specific tax relief regulations regarding Payment and Filing Relief and Extensions, Collections Relief and Extensions, and Taxability and Deduction.

Hawaii Tax Relief

Details on Payment Relief, Filing Relief, and Filing Extensions

Tax Filing Deadlines Extended for All Taxpayers?

Whether tax deadlines are extended for every taxpayer cannot be answered in the affirmative. Instead, the Department of Taxation (“Department”) has established that requests for tax filing extensions and waivers of late payment penalties and interest can be assessed on a case-by-case basis.

How do I request a waiver of penalties and interest from the Tax Relief?

Are you facing financial hardship due to the Hawaii wildfire disaster? Requesting a waiver of penalties and interest could be the solution. When filing by paper, add “2023 Wildfire Relief” to the top center of your return. Additionally, include with your tax filing a statement that explains why you have been adversely affected by the event.

When electronically filing, please be sure to get in touch with a free dedicated tax professional to help you explain how the wildfire disaster is negatively impacting you to the DOT of Hawaii.

I could not file on time due to a lack of electricity or internet due to the wildfires. Is that a good cause for a tax filing extension request?

Absolutely. Due to the devastating wildfires, tax filing can be delayed as a lack of electricity and internet made it impossible. Showing that you were affected by the fires would make you eligible to request a waiver or extension on penalties or interest.

Will this tax relief stay available? How soon will the DOT stop accepting requests for tax relief?

For what duration is relief available? As long as the Director determines necessary to counteract the effect of the wildfires, the Department will carry on considering requests for aid.

Do I still need to pay estimated taxes?

Should I submit estimated taxes? The answer is a resounding Yes. Even with the aftermath of the 2023 Hawaii wildfires, you may request extra time to make the necessary payments. To learn how to go about it, get in touch with our free, dedicated tax professional.

Is there any relief for taxpayers impacted by the Maui and Hawaii wildfires already under an installment payment agreement with the DOT?

Taxpayers will be obligated to resume installment payments following their payment plan. For further details, please get in touch with a dedicated PriorTax Tax Professional for free support from start to finish.

Taxpayers must restart their installment payments in order to comply with their current plan. Please reach out to your assigned collector for more info. If you do not have a contact detail, such as an email or a number, please call a relevant office and ask them to contact your collector.

Is tax relief available for a taxpayer with a property lien impacted by the Hawaii wildfires?

Those property owners affected by the wildfires in Hawaii may be wondering how they can access relief from their property lien dues. At present, the Department will not be providing a release of these liens. However, they could qualify for other forms of assistance, such as waiving interest during this difficult period. Get in touch with a free, dedicated Tax Professional to support your tax relief.

Details on Taxability and Deduction

Damages and Losses from Hawaii Wildfire Enable to Deduct from Tax Returns?

Which damages and losses can I declare on my taxes? We recommend that taxpayers speak with a dedicated tax professional or the IRS to determine suitable tax deductions. Concerning Hawaii income tax, the DOT aligns with section 165 of the Internal Revenue Code, addressed in Publication 547 from the Internal Revenue Service. Please refer to Tax Announcement 2023-03, under section II, to further investigate casualty loss claims.

Is the tax relief taxable?

Regarding taxation, one question lingers: Are tax relief payments taxable? It varies depending on the source of the funds and the purpose for which they are used. To elaborate further, please look at Tax Announcement 2023-03 and section IV to learn more about disaster relief payments.

Are donations to Hawaii Wildfire tax deductible?

The answer is yes. You may deduct donations from your taxes, but only under certain conditions. All donations and gifts from registered and qualified non-profit organizations will be eligible for tax deductions. However, contributions made to individuals or unregistered groups do not qualify. It is necessary to provide proof of the donation to receive the deduction on your taxes.

IRS Announces Tax Relief for Hawaii Wildfire Victims

Posted by admin on August 31, 2023
Last modified: August 31, 2023

The Internal Revenue Service (IRS) has issued a declaration of tax relief to those affected by the wildfires that began on August 8, 2023, in parts of Hawaii. Individuals and businesses affected have until February 15, 2024, to file returns and make required payments. Consideration is given to victims of the wildfire destruction in these areas of Hawaii.

In response to the damage caused by the Hawaii wildfire, FEMA has declared a disaster in Maui and Hawaii counties. As a result of this declaration, those who live or operate businesses in the affected areas are eligible for federal tax relief.

In response to a declared disaster, it has been made possible for those affected to postpone their filing and tax payment deadlines. An example is when deadlines falling between August 8, 2023, and February 15, 2024, can be extended with special permission from the IRS.

The Internal Revenue Service (IRS) has issued a grace period extending to February 15, 2024, for all affected individuals and businesses who need more time to file tax returns between January 1, 2021 and April 18, 2023. This stipulation includes 2022 individual income tax returns, with an original due date of October.

Hawaii Wildfire

The February 15, 2024, deadline also applies to:

  • Quarterly estimated tax payments, which are normally due on September 15, 2023, and January 16, 2024.
  • Excise tax returns and quarterly payroll which are normally due on October 31, 2023, and January 31, 2024.

Businesses whose 2022 tax extension dates have elapsed or will soon elapse by September 15 (i.e., calendar-year partnerships and S corporations) and October 16 (calendar-year corporations) are eligible for the February 15, 2024 deadline for filing taxes.

On or after August 8, 2023, and before September 7, 2023, any late payroll or excise tax payments will receive abatement as long as the deposit is made by the said date.

When a taxpayer is subject to a late tax filing or late payment penalty notice from the IRS that had an original or extended due date during the postponement period, they should contact the number on the notification for the IRS to waive any charges.

Taxpayers affected by a covered disaster area can receive filing and payment relief from the IRS, provided they reside or have business in those areas. Those located outside of such regions should contact a dedicated PriorTax Tax Professional to benefit from this tax relief.

Who are Affected Taxpayers from Hawaii Wildfire?

Individuals and businesses affected by the covered disaster area, including tax-exempt organizations, are eligible for postponement of time to file tax returns, pay taxes, and perform other time-sensitive acts. This also extends to those who do not physically reside within the area but whose records necessary to meet a deadline lie within it. Thus, they, too, are entitled to some form of relief.

All those providing and receiving help during times of tragedy have the right to compensation for any damages incurred as a result of the disaster. That is why anyone affiliated with an official government or charitable organization assisting people affected by a disaster area is eligible for relief.

Taxpayers affected by the August 8, 2023 date will receive some relief from the Internal Revenue Service (IRS), as they can now file all relevant tax documents until February 15, 2024. This includes individual and corporate income tax returns, partnership and S Corporation returns, estate/gift/generation-skipping transfer taxes, annual information for tax-exempt organizations, and employment/excise taxes with either an original or extended due date up through February 15 of this year.

Taxpayers with estimated tax payments due between August 8, 2023, and February 15, 2024, now have an extension until February 15, 2024, to make those payments without facing any penalties for late payment. Those estimates must be paid before the end of that period to avoid penalty charges.

Declaring Casualty Losses from Hawaii Wildfire

For individuals impacted by a federally declared disaster, the option to declare casualty losses on their federal tax return for either the year of the occurrence or the previous year is available. Taxpayers who have selected this option and are reporting these losses on their 2022 returns have extended time until October 15, 2024, to make that choice.

Hawaii Wildfires have caused some taxpayers to seek out the disaster loss on their tax return. Make sure to state “Hawaii Wildfire” and the FEMA disaster declaration number, DR-4724-HI, at the top of your form. A PriorTax Tax Professional can assist individuals through this process from start to finish.

Other Possible Tax Reliefs

Taxpayers affected by disasters may find financial aid within their retirement plans or IRAs. For example, they could qualify for a special disaster distribution to spread the income over three years and avoid the extra 10% early distribution tax.

Those who pay taxes could qualify for a hardship withdrawal in certain instances. Every plan or IRA has separate rules and guidelines that must be adhered to by its participants.

The IRS may provide additional disaster relief in the future.

Taxpayers dealing with the repercussions of a disaster that the IRS has contacted in regard to a collection or examination should make their situation clear to the agency so that they can be given appropriate consideration.

Four Top Tips on Getting More Tax Refund

Posted by admin on August 24, 2023
Last modified: August 25, 2023

How can you maximize your tax refund this year? Are you ready to maximize the tax refund you’ll get this tax season? Taking advantage of all available tax breaks is a great way to reduce your liability and, as a result, make the most of your return. Here are four tips to consider when seeking a larger refund – remember that for more long-term financial planning, consulting with an experienced advisor should be your top priority.

Let’s Maximize Your Tax Refund.

Are you hoping to get the most out of your tax return? Although it may be tempting to overpay in taxes, professionals do not advise this. This results in a refund from the government and can mean that your money is going to them instead of you. A better option is to adjust the amount taken out each month so that when tax season arrives, you’re not receiving a large return – allowing you to put the extra cash toward investments or other necessities during the year.

Are you hoping to get a bigger refund at tax time? Here are four actions that can help you maximize the money coming back from your tax return.

maximize tax return

Firstly, Filing Status

Choose Your Tax Filing Status Wisely.

Your filing status can majorly affect the size of your tax refund, both for single and married individuals. For couples that are wed, filing joint taxes is usually the way to go. However, it might be more beneficial to file separately in some instances.

An option to consider when filing taxes is filing separately. This could be beneficial when one or both spouses have a lot of medical or business costs. By doing this, your adjusted gross income can get reduced, and the deductions you can make may increase due to them exceeding a percentage of your income.

When considering your filing status, it is important to look at the potential tax credits you may need to include by filing separately. To fully understand which option could be more beneficial for you, do some calculations or use a free tax return calculator to gain an estimate.

For those who are unmarried, it is worthwhile to investigate whether you are eligible for head of a household standing. Typically, this requires that more than half of the upkeep expenses for your home and applicable dependents have been shouldered by you in twelve months.

When it comes to tax season, the existence of a dependent can hugely impact your return. This could be a child or an elderly parent – anyone you support financially. Filing as head of household is worth considering since doing so grants you access to more generous deductions than single filers receive.

Second, Tax Credits

Maximize your tax refund with tax credits. Tax credits are a great way to decrease the overall amount of taxes owed to the IRS. On a dollar-for-dollar basis, your tax bill can be significantly lowered when these credits are utilized. For instance, say you owe $6,000 in taxes but then take advantage of a credit worth $1,000 – that reduces your total liability to just $5,000.

Common tax credits include:

  • Tax credits can be a great way to reduce taxes owed. A popular type of credit is the Earned Income Tax Credit, which allows eligible tax filers to receive up to $6,728 for three or more qualifying children in 2021 and $6,935 in 2022.
  • One of the most well-known tax credits is The Child and Dependent Care Tax Credit, which can reimburse up to $3,000 for one dependent or $6,000 for multiple dependents. This credit assists with childcare costs incurred during the year.
  • Taking advantage of tax credits can be a great way to reduce your taxes. One popular option is the Child Tax Credit, which provides up to $2,000 per dependent in 2022 and was worth $3,600 in 2021. Your income will determine how much you may receive from the tax credit.

The amount of tax credits you can claim may be affected by various factors, such as income, filing status, and the presence of dependents. Other considerations for those seeking to use educational-based tax credits include timing and the eligible expenses.

Subsidies and other benefits may be available to those who opt to make certain energy-efficient upgrades in their homes. For instance, the Premium Tax Credit can help cover some expenses associated with purchasing a health care plan through the federal exchange.

Third, Tax Deduction

Tax Write-Offs Should not be Ignored. Although credits often yield a larger tax return than deductions, taking advantage of appropriate deductions is important. Deductions have the impact of reducing the amount of income that is subject to taxation, as opposed to just cutting down on what you owe in taxes.

Filing taxes can be confusing, particularly with the Trump tax plan’s doubling of the standard deduction. Generally, this makes taking the standard deduction the simpler option; however, itemizing may be more beneficial in cases where many deductible expenses are incurred.

The IRS allows you to deduct various costs related to work or other activities. Mileage, lodging, and home office expenses are deductible for self-employed individuals, just as donations to charitable organizations and mortgage interest can be taken off your taxes. Even student loan interest and gambling losses can be deducted – but the amount of each deduction does vary, so it’s important to keep appropriate records like receipts or bank statements to support your claims.

Fourth, the IRA

Putting away funds in a conventional IRA is an excellent way to grow your savings and take advantage of the extra tax benefit. You can contribute to your IRA for the past tax year until the April filing date and be eligible for a full or partial deduction. This kind of deduction goes above the line, permitting you to still claim it even without itemizing.

Regarding your retirement savings, a few tax credits are available that could help reduce your taxable income. One such credit is the Retirement Saver’s Credit, which applies to contributions to both traditional and Roth IRAs. However, your income must meet certain criteria to be eligible for this credit.

Many of us look for good ways to increase tax refunds during the tax season and make every penny count. Knowing which tax benefits you are eligible for can help you achieve that goal. Understanding the available deductions and credits could put more money back into your pocket.


Maximizing your tax return can be tricky business, but it is made much easier when working with the experts at PriorTax. Team of Free dedicated Tax Professional is knowledgeable and experienced in helping clients get every tax deduction and tax credit they qualify for – often resulting in a larger tax refund! Whether you’re filing as an individual, family, or even a small business owner, PriorTax will provide trustworthy guidance throughout the entire process so that you don’t have to feel overwhelmed while tackling your taxes.

Are You Receiving a Smaller Tax Refund

Posted by admin on August 17, 2023
Last modified: August 18, 2023

Could There be Unforeseen Instances in Getting a Smaller Tax Refund?

Reach out to one of our dedicated Tax Professionals at PriorTax should you believe the debt is not owed or there is a discrepancy in the amount taken from your refund. A Free dedicated Tax Professional could sort out the difference between your return and the original tax refund when you received a smaller tax refund.

The tax refund I received is less than expected. Why am I getting a smaller tax refund?

Are you concerned about the amount of your smaller tax return refund? We’ll assist you in understanding why the refund from your taxes is less than anticipated.

It is pretty normal for this to occur, often resulting from the IRS utilizing a portion of your refund money to cover any outstanding government debts that are owed.

In many cases, the IRS will use a portion of an individual’s tax refund to cover any unpaid government debts. These could range from overdue federal tax payments to student loan repayments and more. Other examples include past-due child support, outstanding state income taxes, fraudulent unemployment compensation wages or contributions due to a state fund, and SBA loan repayments.

HUD (Department of Housing and Urban Development ) loan repayments
Managing unpaid taxes comes under IRS jurisdiction, while any other debts are handled by the Department of Treasury’s Bureau of Fiscal Services (BFS). You may receive a notice from BFS detailing why your tax refund is less than what you expected should part or all of it be used to settle a debt.

When part or all of your anticipated tax refund is allocated to pay off a debt, BFS will provide notification to clarify the details. This notice will explain the initial refund amount, offset amount (the portion they are taking), and details of the agency that is receiving payment such as its address and phone number.

smaller tax refund

But, Did You Get More in Tax Refund instead of less?

You May Have Overpaid Withholding Taxes

Believe it or not, getting money back from the IRS is only sometimes good. That may seem odd, but it’s true. Receiving a refund can have implications that may ultimately cost you more in the end.

Nobody likes giving Uncle Sam a loan without collecting interest, yet this may be the situation you are in with your payroll taxes. Too much is likely being withheld, meaning you could be getting more of your money back. To ensure you’re not missing out, it’s wise to double-check your withholding amounts. That way, you can use the funds how and when you want to – rather than doing a last-minute scramble when tax season comes around.

One way to review your withholding taxes is with an IRS Tax Estimator. You’ll need to have pay stubs and any other paperwork related to income on hand. Once you put in all that information, it can tell you what your tax liability looks like.

Once you obtain results from this estimator, it’s possible to decide whether or not filing a new W-4 form should be submitted to your employer.

One way to guarantee success at tax time is to look into withholding. Doing this makes it possible to ensure the proper amount of taxes are taken out and avoid any unpleasant surprises when filing. Additionally, this can help you decide whether you should change the amount of taxes deducted from each paycheck.

Instead of allowing Uncle Sam to loan you money, make sure your withholding is accurate by periodically checking it. Waiting until the end of the year can lead to over-withholding and an unnecessary loan from the government.

How to Maximize Your Tax Refund with Form W-4

Posted by admin on August 10, 2023
Last modified: August 10, 2023

Maximizing your tax refund relies upon a few easy processes, research, and some preparation. Examining your tax situation, involving your partner when finishing up your tax form W-4s, and taking advantage of certain tax credits can assist in boosting the size of your refund. Additionally, PriorTax free dedicated Tax Professional can help you determine which credits give you the greatest tax refund.

Review your Form W-4 with our Tax Professional for Tax Refunds Over Looked

Before beginning a new job, your employer requires you to fill out Form W-4. This form conveys how much federal income tax needs to be taken from your paycheck. The quantity of taxes deducted from wages depends on the combination of income and credits declared in the W-4 document.

Are you reviewing your W-4? It’s time to decide. Are you aiming for a bigger refund or a bigger paycheck? With less taken out of each pay period, you can count on receiving larger wages throughout the tax year.

tax refund

Elements to review when amending your Form W-4 may include.

When filing your W-4, there are crucial elements to take into account. By claiming credits such as the Child Tax Credit or the Other Dependent Credit, you are reducing the amount of money being withheld from your paycheck.

When you are in the process of filling out a Tax Form W-4, there are several things that you must keep in mind. For starters, you may need to adjust the amount of withholding on your taxes should you have multiple sources of income, like an extra job or investments.

When filling out your W-4 form, there are a few points that you should bear in mind. These include the possibility of withholding extra money from each paycheck for income tax purposes.

By indicating more income on your W-4 form, your paychecks will be smaller since greater tax amounts will be taken out. This increases the possibility of withholding too much, which may result in a bigger tax refund.

When you anticipate certain credits or deductions, the potential implications are clear; bigger paychecks and possibly owing some extra tax or receiving a smaller refund. To make sure you enter accurate information on your W-4 form, consider using a our Prior Tax Calculator. It is designed to provide a reliable estimate of what should be entered.

Reconsider your Tax Filing Status.

The selection of a filing status can have an effect on getting a refund. Your filing status decides several important elements, such as your standard deduction, whether you have to file taxes, the credits available to you, and how much tax you pay or refund you get.

When filing their taxes, individuals have multiple statuses to select from. Most commonly, people opt for married filing jointly or separately, single person, or head of household designations.

Having an experienced, dedicated Prior Tax Professional on your side is essential to ensure the best outcome for you, from the beginning of the process through to completion. They will help you decide which options work best for your particular circumstances to maximize your tax refund.

Look into Claiming the Earned Income Tax Credit

Reap the rewards of the Earned Income Tax Credit. Are you a working family, an independent contractor, or someone with moderate to low income? Then you may be eligible for the Earned Income Tax Credit. This tax break reduces taxable liability and could result in a sizable refund!

In order for you to be qualified, the following criteria must be met: you should have a valid Social Security number and be either a U.S. citizen, a year-long resident alien, or a non-resident alien married and filing jointly with an American citizen or resident alien. Additionally, there must be verifiable income from self-employment, an employer, or working on a farm, not including any person being claimed as a dependent or child of another individual. Lastly, those in the age range between 25 and 65 living in the United States for at least half of the year are eligible.

And in order to receive the EITC, you must file a tax return, even if you owe no taxes, which you can read more about here.

Have you Claimed the Child and Dependent Care Tax Credit?

Make sure you take advantage of the Child and Dependent Care Credit. Available to those with a qualifying child or dependent, this credit is based on a percentage of what you paid for care-related expenses.

As of the 2022 tax year, a maximum amount of $3,000 in expenses can be claimed by one individual and $6,000 by multiple. It is important to remember that any dependent care benefits provided by an employer must be factored into this deduction total.

Important Qualifications

Are you the parent of an individual who is 13 or younger? Or do you have someone dependent on you due to physical or mental impairments and living in your household for the majority of the year? How about your spouse, who is unable to look after themselves and reside with you throughout the year? These may all be qualifying individuals.

Some Other Criteria Must be Considered.

In order for you, as a parent or guardian, to be eligible for the credit, there are various conditions that must be fulfilled. 

It is necessary that your filing status is not married, filing separately, and none of the caregivers are your spouses or parents of the child. Moreover, each dependent being claimed must have a valid Social Security number. As well you must provide the full name, address, and Social Security number of all care providers.

The American Rescue Plan set to be effective in 2022 brings forth some noteworthy modifications to the Child and Dependent Care Tax Credit. The plan markedly enhances the expense amount that can qualify as creditable, lessens the impact of income levels on it, and makes it completely refundable. This implies that you can claim this tax credit regardless of whether or not you owe the government taxes – something that has yet to be possible.

In a nutshell

Picking the right tax filing status related to your circumstances can reduce your taxes and amplify the tax refund you will receive. Utilizing our Prior Tax Calculator is an ideal way to forecast what needs to be entered on your W-4 and adjust the return amount when tax preparation rolls around. Should you qualify, claiming the Earned Income Tax Credit can lessen your tax bill and potentially generate a refund even when no taxes are owed?

Ensure you get the most from your tax return by leveraging a dedicated PriorTax Tax Professional. With our support, get started-to-finish service and never worry about filing with confidence. Our Free Dedicated Tax Professional helps you through the process with expert guidance and assistance. Answer straightforward questions and benefit from our guarantee of maximum refunds. However, you choose to handle it, know that PriorTax will take care of everything so that you can relax this tax season.

5 Most Commonly Overlooked Tax Deductions and Tax Credits

Posted by admin on August 3, 2023
Last modified: August 3, 2023

Too often, taxpayers pay more taxes than necessary due to overlooking certain tax deductions. Here are five tax deductions commonly missed when filing a return to help you keep more of your own money. Knowing these may help you save during tax season. Find your PriorTax dedicated tax professional to assist you for free from start to finish.

Don’t miss out on more than $1 trillion in Tax Deductions

Don’t miss your chance to take advantage of the over $1 trillion in tax deductions available. Research indicates that around 45 million taxpayers have utilized itemized tax deductions worth an amazing $1.2 trillion in their 1040s. These are truly astounding numbers.

In 2023, taxpayers who opted for the standard tax deduction were estimated to total about $750 billion. However, many of these people may need to realize they are potentially missing out on tax deductions they could have taken advantage of. (Any taxpayer who is aged 65 or over this year should note there is a bigger standard tax deduction than those under 65.)

When it comes to taxes, you want to do everything possible to get the biggest refund you can. To help out, we’ve identified five tax deductions that are often overlooked.

tax deduction

1. DRIPs Reinvested Dividends

Taking advantage of reinvested dividends can be a great way to reduce taxes significantly. Unfortunately, many people overlook this strategy. It isn’t technically an official tax deduction, but the savings it provides can be substantial. When investing, many investors opt to have their stock and mutual fund dividends automatically reinvested in additional shares. This choice can be beneficial come tax time since it increases the investor’s “tax basis,” – thereby reducing the taxable capital gain (or increasing the potential for a tax-saving loss) when they sell their shares.

2. Student Loan Interest Payments

In the past, receiving a tax break was impossible when someone other than the loan recipient repaid a debt. To be eligible for any deduction, both accountability of the loan and personal payment were required. This meant that even when parents paid back loans on behalf of their children, they did not receive any form of taxation relief.

In this case, there’s a unique exception. You may be aware that you have the potential to take a deduction. Yet, even when somebody else reimburses the loan, the Internal Revenue Service treats it as though they gave you the money personally, and then you paid off the debt. Therefore, an independent student can potentially tax deduct up to $2,500 of student loan interest whether or not they claim to be dependent.

3. Child and Family Dependent Care Tax Credit

Making the most of tax credits can reduce your tax bill substantially. The tax credit for Kids and Dependent Care takes this concept even further, providing a dollar-for-dollar reduction in taxes owed. It is much more painful to miss out on an opportunity like this than a deduction that merely reduces the amount of taxable income.

The Child and Dependent Care Tax Credit may be easily forgotten when paying for childcare expenses through a tax-favored reimbursement account at work. For 2022, the legal limit is $5,000 of such costs that can go through this plan. However, even though up to $6,000 in care bills could qualify for the credit, the amount paid from a tax-exempt account will not be considered part of it.

By contributing at least $5,000 to a plan at work, you could be eligible to receive the Child and Dependent Care Credit. This credit can cut your tax bill up to $200 based on 20 percent of the costs associated with childcare. Low-income households are even entitled to a higher percentage of credit amount.

In 2021, the American Rescue Plan made a massive impact on the Child and Dependent Care Credit and the amount of taxpayers that will benefit from its highest rate. Signed into law on March 11th, the new legislation vastly increasing this credit makes it fully refundable, too – so even those who do not owe taxes can reap its rewards.

Changes to the Child and Dependent Care Tax Credit

There are certain modifications to the Child and Dependent Care Credit for the tax year 2022 (the taxes you file in 2023).

For taxpayers claiming a tax credit for qualifying child and dependent care expenses, an increase in what is allowed to be claimed has gone into effect. Up to $8,000 can be claimed for one qualifying individual and up to $16,000 for two or more individuals.

The tax year 2022 brings increased benefits for individuals who utilize a dependent care flexible spending account (DCFSA). Specifically, those whose adjusted gross income (AGI) is up to $125,000 will have their credit percentage reduced. Furthermore, up to $10,500 of employer-provided dependent care services can be received tax-free, an increase from $5,000 in previous years.

4. EITC Earned Income Tax Credit

The IRS estimates that 25% of taxpayers who qualify for the EITC Earned Income Tax Credit fail to claim it each year. This significant omission is attributed to an array of factors, such as confusion over eligibility criteria and the need for knowledge on the availability of the tax credit. Millions of lower-income citizens still take advantage of this program annually despite these issues.

In 2022, eligible taxpayers can receive a refundable tax credit known as EITC to supplement their wages. This credit amount ranges from $560 to $6,935, depending on different tax filing statuses. It’s important to note that this credit is not limited exclusively to those with lower incomes – it may also apply to those who earn moderate amounts.

Hundreds of thousands of people once viewed as “middle class” now find themselves in the “low income” bracket due to various reasons such as: getting laid off, experiencing a pay decrease, or having their working hours reduced. This has impacted many professional workers as well.

When filing taxes, it’s important to consider your income, marital status, and family size. Doing so can result in getting a refund through EITC. Even without owing taxes, you still need to file a tax return in order to receive a refund from this credit. Furthermore, those who were eligible for EITC but missed it can apply for up to three prior years of tax refunds.

5. Points in Refinancing Mortgage

Buying a house and refinancing a mortgage are both valid options for homeowners, but they involve different taxes. Those who buy a house can deduct points paid to obtain the mortgage all at one time, while those who opt to refinance their mortgage must deduct the points over the life of the new loan. For instance, with a 30-year mortgage, you can claim $33 per year for every $1,000 points you have paid.

When you sell the house or refinance again in the same year, you have an opportunity to tax deduct all of your unclaimed points. However, this isn’t applicable when you decide to refinance with the same lender.

Do I Need Tax Return Amendment?

Posted by admin on July 27, 2023
Last modified: July 28, 2023

You’ve noticed errors or exclusions made on the tax return? It’s possible to do tax return amendment after submitting your original tax filing. Normally, the IRS would catch any mistakes during processing, but in certain scenarios, you may need to file a tax amended return in order to make corrections or make other modifications to the tax return itself.

This year, some of the changes to tax laws set by Congress apply to previous years’ taxes. This raises the question of whether you should go ahead and file an amended tax return or not. Understanding how to redo your taxes is key in determining which option is best for you.

tax return amendment

Do You Need to Revise Your Taxes This Year?

Have you ever submitted your tax return and discovered you’d made a mistake or learned new information that would alter the outcome? You may have asked yourself, is it possible to redo my taxes?

With the enactment of numerous new tax rules for 2018, it is important to consider whether it could be beneficial for you to submit an Tax Return Amendment. Many of us have confronted this issue before. To clarify matters, here’s a guide on filing an amended tax return and the benefits it could bring.

It is important to file an amended return in certain scenarios. This includes when corrections or omissions are needed to your income, a change of filing status, modifications to deductions, and the desire to apply for or adjust a tax credit.

Taking the time to submit an amended return can be a worthwhile effort. It ensures your tax return is up-to-date, enabling you to get the most out of any potential refund or lower what you owe. Moreover, it will reduce the chances of drawing attention from the IRS in the form of audit notices.

A Few Tax Return Amendment Scenarios

Scenario 1. You filed your taxes and then received another W-2 or other income statement.

In some cases, after you have already submitted your tax return, a new income statement could appear. This could include a W-2 from a job held only for a short period of time or even an interest statement from an account you had completely forgotten about. Even though the amount on the form may be small, it can still influence how much you owe in taxes.

Before filing your taxes, you must report all of your income for that year in accordance with IRS regulations. One way to do this is to amend your tax return, and it’s important to ensure you have received all necessary documents first. To comply with legal requirements, employers and businesses must send out all income statements such as W-2s or 1099-MISC by January 31st of each year.

Scenario 2. You missed claiming a credit or deduction you were eligible to receive

Forgetting to claim a credit or deduction can be costly when it comes to taxes. Even though you have the ability to take advantage of various credits and deductions that could lower your bill, not claiming them might mean losing out on money. It’s possible to file an amended return in order to get those dollars back.

When you have paid college tuition during the tax year, there are two credits that could potentially be claimed: the American opportunity tax credit and the lifetime learning credit. Filing your 1040 is not enough, though – an amendment needs to be filed in order to claim educational credits.

Major Tax Breaks from Tax Reform

Tax Reform Aids Taxpayers with Tax Breaks

Taxes on any income and gains must be paid as part of the taxation system. Consequently, in order to incentivize certain activities that are beneficial for society, Congress has implemented tax breaks which can lessen the overall duty a taxpayer is obliged to pay. Therefore, it is highly recommendable to get an up-to-date understanding of all changes, credits, and extensions prior to submitting an Amended Tax Return form.

How To File a Tax Return Amendment

Need to make some adjustments? Filing an amended return is the way to go. To get started, you’ll fill out Form 1040-X, Tax Return Amendment, and attach any corrections or additional documents that weren’t included with your original return. Doing so will bring your filing up-to-date with accurate tax information. Changes to federal returns filed in 2019 and later can be done electronically.

As laid out by IRS regulations, you have up to three years from when your original tax return was submitted to submit an amended return with a claim for tax refund. Additionally, two years is also allowed for filing after outstanding tax has been paid. It should be noted that any returns sent prior to its due date (with or without extensions) are considered as having been filed on that day. Furthermore, withholding taxes from sources such as a W-2 is counted as payment towards taxes on their due date.

Since the implementation of tax reform, it is crucial to address any issues that have arisen as a result. Filing an amended return is the best way to rectify mistakes and fix oversights. Therefore, it is essential to act promptly in order to set yourself up for success in the future.


In order for adjustments or corrections of a previously filed tax return, the appropriate form is Form 1040-X: Amended Tax Return. This must be accompanied by any documents that were not included in the original submission. Since 2019, amended federal tax returns can also be lodged electronically.

In the event of an oversight or mistake on your original submission, filing an amended tax return can be a wise move. This will allow for revision in terms of income declared, filing status, deductions taken, and claiming/correcting any tax credits owed. According to the IRS rules, however, anyone wishing to claim a refund must submit their amended return within three years from when they originally filed the return – OR – two years from when they settled their outstanding taxes (whichever is later).

Get your taxes done efficiently and accurately with a free PriorTax Dedicated Tax Professional. Whether you prefer having an expert guide you through the process from start to finish or taking advantage of the easy-to-use tool for self-filers, you can trust that PriorTax will guarantee your maximum refund. With our help, filing your taxes can be a breeze – answer straightforward questions, and we’ll ensure everything is taken care of so that you can rest assured knowing it’s been done right.

Student Loan Interest and Tax Form 1098-E

Posted by admin on July 20, 2023
Last modified: July 21, 2023

Are you aware of the Tax Form 1098-E for Student Loan Interest? For individuals currently repaying a student loan, Tax Form 1098-E may be mailed out from each lender. This document displays the amount of interest paid for the year. Taking advantage of tax deductions on federal tax returns is possible with this tax form, but more is needed to guarantee qualification to do so.

How can Tax Form 1098-E help you?

The Tax Form 1098-E will be sent to you by lenders when you have made payments of $600 or more in student loan interest during the year. This amount is taken from all loans a borrower has with the same lender, though it can be broken down into each separate loan. The sum shown in box 1 of Tax Form 1098-E shows a person’s total interest payments for that tax year.

How Can You Get Tax Deduction from Student Loan Interest?

Knowing the right moment to tax deduct student loan interest is important. This particular tax deduction can be taken as an adjustment while working out your adjusted gross income, otherwise known as AGI. It’s worth noting that you are not expected to itemize your tax deductions for this option to be available.

In order for your student loan interest payments made during the year to be tax deductible, they must have been taken out by you, your dependents or your spouse in order for them to take classes. When filing taxes separately or as a single filer with an adjusted gross income over $85,000 for 2022, or $175,000 when married and filing jointly, it is impossible to claim any student loan interest deduction. Modified adjusted gross income (MAGI) takes the AGI figure and returns certain tax deductions.

Preparing and filing your taxes doesn’t have to leave you exhausted. PriorTax takes the heavy lifting out of any calculations; all you need to do is answer some simple questions and leave the rest up to us, quick and easy. Our free and dedicated PriorTax Tax Professional will take care of putting all your answers onto the relevant tax forms.

student loan interest

How Much of Student Loan Interest is Tax Deductible?

What is the tax deduction for interest expenses? No matter the total sum paid in interest, you are eligible to deduct up to a maximum of $2,500. Those benefitting from this tax break should report the deductible amount on Schedule 1 as an alteration to their taxable income. Tax Form 1098-E provides a comprehensive breakdown of the reported amounts. However, it is still possible to include further student loan interest payments, which were not featured on the form. These additional payments must have been made towards a qualified loan for them to be eligible for tax deduction.

Checking the Box 2 from Tax Form 1098-E

If Box 2 of the Tax Form 1098-E is ticked, it indicates the quantity mentioned in Box 1 does not include the loan’s initiation fees and/or any capitalized interest. Nevertheless, this should apply to loans obtained before September 1st, 2004.

When you take out a loan, the lender may charge you a fee known as the origination fee. This amount is usually determined as a percentage of your loan and is factored into the total funds disbursed. Additionally, you can include a portion of this fee in your tax deductions for student loan interest. By dividing the origination fee by the years it takes to pay off the loan, one can determine how much they can claim every year when filing their taxes.

When it comes to unpaid interest, should the lender opt to add it onto the principal loan balance (capitalization), the deductible portion of that amount must be figured out similarly to when dealing with an origination fee.

Ensure your taxes are done correctly with the help of a Dedicated PriorTax Professional. Give us a call at 877-289-7580 during our regular office hours to get one of our specialized tax professionals on your side. Alternatively, you can take only 10 minutes to answer simple questions and be guided through the process of filing your taxes confidently using PriorTax. Whichever way suits you best, we guarantee that you will receive the maximum refund possible.