We are coming down the home stretch!! For those of you that already filed - congratulations! For those that have not, a few updates on what to expect in the coming days/months
If you have NOT yet submitted your data to us...
At this point, assume we will file an extension for you.
You should still submit your data to us as soon as possible but depending on the complexity of your return, it will likely not be completed before April 15th.
See below for additional information on extensions but we will automatically file an extension no later than Friday, April 11th
If you have submitted your data to us...
You should assume we will complete your return by the April 15th deadline.
We are working on your return and have either reached out with follow up questions/data needs or will do so in the coming days.
While we concentrate our focus on completing returns, responding to phone calls and emails inquiring about return status takes time away from doing the actual work. Trust that we are working on all returns for which we have received data.
As we approach April 15th, in the event there are still open issues or missing data, we will automatically file an extension by Friday, April 11th.See below for more information on extensions
EXTENSIONS
FREQUENTLY ASKED QUESTIONS
How much do you charge for an extension?
There is NO CHARGE for an extension - we are happy to provide this complimentary service to our clients
What do you need from me to file an extension?
For existing clients (including former DiLorenzo and Kinsey clients), in most cases NOTHING(see below if you expect to owe money)
For new clients, as long as we have the Social Security numbers and birthdates for you, your spouse and any dependents to be included in the return, we have everything we need (see below if you expect to owe money).
Do I need to file an extension if I know I am going to get a refund?
NO - you have 3 years from the filing deadline to file a return and claim your refund
What if I am going to owe money - how does that impact an extension?
An extension only extends the time to file the official tax return.
It does NOT extend the time to pay the taxes you will owe.
As a result, you should still make a payment at the time you file an extension if you know you will owe money.
How do I know how much I owe without filing the actual return?
The short answer is you don't.
You have to provide the best estimate and make that payment no later than April 15th to avoid any potential penalties and interest.
What if I know I will owe but choose not to pay anything at the time I file an extension - what happens?
You will be charged interest and any potential penalties as determined below
INTEREST - Any tax owed on April 15th that is not paid will automatically be charged interest as you are essentially taking a loan from the IRS. The current IRS interest rate is 8%
PENALTIES - you could be subject to a failure to pay (FTP) Penalty
FTP only applies from April 15th forward.
The FTP is .5% of the amount owed for each month or partial month the balance is outstanding. The FTP is capped at 25% of the amount owed
What is an underpayment penalty and how does it work?
Unlike the FTP above, the underpayment penalty is based upon what taxes you have paid up until the April 15th deadline (so it looks back at how much tax you paid during the year)
Our tax system is referred to as a "pay as you go" system meaning we all have to pay taxes throughout the year in order to help fund the government. We can't simply write them one check on April 15th for the taxes owed the prior year.
To avoid an underpayment penalty, taxpayers with AGI under $150,000 must pay (through estimated payments and/or withholding taxes on W2 and 1099 income), the lesser of A) 90% of the 2024 taxes owed or B) 100% of the taxes from 2023 (110% if your AGI is over $150,000)
2025 Tax Planning
For all clients seeking further discussions on tax strategy/planning, we look forward to scheduling those once we get past the April 15th deadline.
Balcerzak Financial Services, LLC | 1385 S Colorado Blvd. Suite 700 | Denver, CO 80222 US
