Atlanta Tax Law Blog

Georgia residents who can't file their tax return by the April 17 deadline are entitled to ask for an additional six months to do so. In most cases, the extension request is granted automatically. Furthermore, it is generally possible to do so by filing IRS Form 4868 or through a taxpayer's preferred tax filing software program. It is important to point out that this is only an extension to file the return itself.

Any taxes owed to the IRS are still due by the April 17 deadline. As a general rule, it is a good idea for an individual to file a tax return or an extension even if he or she cannot pay a balance owed. This is because the IRS levies a 5 percent penalty per month up to 25 percent of an unpaid balance unless a person has a good reason why this wasn't done on time.

Many companies and business owners in Georgia can begin to develop a sense of complacency about the danger of an IRS audit for their firm, especially given the news that IRS resources have been depleted. There have been cuts to the agency's budget over the past few years that have meant that the tax authority's Large Business and Internationa division takes up fewer examinations and makes smaller audit adjustments. Many business owners complete their taxes and rest assured that they do not need to be concerned about an IRS audit.

However, the passage of comprehensive tax reform in December 2017 could lead to significant changes in both the number of audits and the level of care that businesses must take in preparing their records. Many tax professionals are awaiting guidance from the IRS and the Treasury Departments and looking into creative strategies that make use of changes in the law. The tax reforms include reduced tax rates and accelerated expenses, but can also elevate the potential of being selected for an IRS audit.

Business owners in Georgia typically understand the importance of maintaining good records so that they can meet their tax responsibilities. Few anticipate being subjected to an audit. However, some business owners have taken advantage of recent changes in tax law to reduce the tax liability of their businesses. As a result, the IRS may be looking more closely at the tax returns filed by these businesses.

Because the IRS can audit any return that is less than three years old, it is essential for business owners to protect themselves against this possibility. This means that companies should keep good records, retain copies of relevant documents and spreadsheets, and work with accountants and other financial personnel to ensure that their processes are in order.

To avoid delays in receiving tax refunds, Georgia residents should take care to avoid certain common mistakes when completing their returns. While many people may believe that only significant mistakes will cause the Internal Revenue Service to hold on to their refunds, many delays are actually caused by easily preventable mistakes.

One common error is putting the incorrect name on a tax return. Taxpayers are advised to provide the name that is printed on their Social Security card. If a person changes their name, the Social Security Administration should be contacted so that it and the IRS will have the same information.