Michael Atias
Online Trading Academy
Individual tax returns are due April 17, 2018. However, many traders, investors and other taxpayers may not be fully ready to file a tax return by the due date. If you are one of them, make sure you file for a tax extension.
You might be waiting on a corrected 1099-B forms, waiting to receive a K1 from a business entity you own or have invested in, trying to figure out how to handle the wash sale rules or just want more time to weigh your options and make better decisions. The good news is, the IRS will allow you to have an automatic 6-month extension to file your tax return. Your new tax deadline will be October 15, 2018.
Here are some tips for filing a tax extension:
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To be eligible for an extension you must file tax form 4868 no later than April 17, 2018. The extension is only for the time allowed to file your return, but not an extension of time to pay any taxes owed.
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Avoid penalties and interest. The IRS can impose 3 major type of penalties for overdue tax debt: underpayment penalty (4%), late payment penalty (0.5% per month up to a maximum of 25%) and late filing penalty (max 25%). Make sure you pay any amounts owed prior to April 17, 2018 to avoid these penalties.
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You’ve got payment options. If you cannot pay in full by the due date then make a partial payment, ask for an installment plan or use your credit card to pay your tax bill. Do this before the tax due date even if you are or have filed for a tax extension.
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Avoid last minute errors. Make sure all social security numbers entered on the tax extension forms are correct. Also, make sure your bank account and routing numbers are correct if you have any amounts paid directly from your bank account.
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MTM Election. If you plan to make MTM election, filing an extension does not allow you to make the election later. If you want to elect MTM then you need to attach the election to your 4868 extension form and file before April 17.
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IRA Contributions. All contributions to an IRA must be made by April 17 to be included in your 2017 tax return. Filing an extension to file does not give you the right to delay any IRA contributions intended for the 2017 tax year.
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FBAR Reporting. If you have a requirement to report your foreign financial accounts, you need to file a separate tax extension. Form 4868 does not cover extension of time for filing for FBAR or Fincen reports.
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Talk to a tax professional. You do not need to do this on your own. A tax professional can provide you with more tax planning ideas prior to the tax deadline.
This content is intended to provide educational information only. This information should not be construed as individual or customized legal, tax, financial or investment services. As each individual's situation is unique, a qualified professional should be consulted before making legal, tax, financial and investment decisions. The educational information provided in this article does not comprise any course or a part of any course that may be used as an educational credit for any certification purpose and will not prepare any User to be accredited for any licenses in any industry and will not prepare any User to get a job. Reproduced by permission from OTAcademy.com click here for Terms of Use: https://www.otacademy.com/about/terms
Editors’ Picks
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GBP/USD reclaims 1.3600 and above
GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.
USD/JPY gathers strength to near 157.50 as Takaichi’s party wins snap elections
The USD/JPY pair attracts some buyers to around 157.45 during the early Asian session on Monday. The Japanese Yen weakens against the US Dollar after Japan’s ruling Liberal Democratic Party won an outright majority in Sunday’s lower house election, opening the door to more fiscal stimulus by Prime Minister Sanae Takaichi.
Editors’ Picks
USD/JPY gathers strength to near 157.50 as Takaichi’s party wins snap elections
The USD/JPY pair attracts some buyers to around 157.45 during the early Asian session on Monday. The Japanese Yen weakens against the US Dollar after Japan’s ruling Liberal Democratic Party won an outright majority in Sunday’s lower house election, opening the door to more fiscal stimulus by Prime Minister Sanae Takaichi.
EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates
Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.
Gold: Volatility persists in commodity space
After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.
Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave
US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.
Three scenarios for Japanese Yen ahead of snap election Premium
The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.
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