FAQs & Other Resources

Federal Taxes

• How do I file an extension? - https://www.irs.gov/forms-pubs/extension-of-time-to-file-your-tax-return

  • Form 4868 - Application for Automatic Extension of Time to File: https://www.irs.gov/forms-pubs/about-form-4868

• How can I make a payment to the IRS? - Make a payment

• What's the status of my federal tax refund? - Where's my refund?

• How can I calculate my tax withholdings? - IRS Tax Withholding Calculator

• What's a deduction? - A tax deduction is an expense that can be subtracted from an individual's or business's taxable income, which can ultimately lower the amount of tax owed to the government. 

• What happens if I don't file my taxes on time?

If you don't pay your taxes on time, you may be subject to a number of penalties and fees. Here are some potential consequences of failing to pay your taxes on time:

1. Interest charges: The IRS charges interest on unpaid tax liabilities, and the interest rate is typically higher than the rate on most credit cards.

2. Late payment penalties: The IRS also charges a penalty for failing to pay your taxes on time, which is usually 0.5% of the unpaid taxes for each month or part of a month that the taxes go unpaid. This penalty can increase up to 25% of the unpaid taxes over time.

3. Collection actions: If you fail to pay your taxes, the IRS may take collection actions against you, such as placing a lien on your property or garnishing your wages.

4. Legal consequences: In some cases, failing to pay your taxes on time can lead to legal consequences, including fines or even imprisonment in extreme cases.

• What's the difference between a credit and a deduction?

A tax deduction and a tax credit are two different ways to reduce the amount of tax you owe, but they work in different ways.

A tax deduction reduces your taxable income, which means that you pay taxes on a smaller amount of money. For example, if you have a taxable income of $50,000 and you take a $5,000 deduction, your taxable income is reduced to $45,000, and you pay taxes on that amount instead. Deductions are based on specific expenses or contributions, such as charitable donations, mortgage interest, or business expenses.

A tax credit, on the other hand, directly reduces the amount of tax you owe. For example, if you owe $10,000 in taxes and you have a $2,000 tax credit, you only have to pay $8,000 in taxes. Tax credits are typically based on specific actions or circumstances, such as adopting a child, paying for education expenses, or installing energy-efficient home improvements.

In general, tax credits are more valuable than deductions because they directly reduce the amount of tax you owe, whereas deductions reduce your taxable income. However, it's important to note that the rules surrounding deductions and credits can be complex, so it's generally a good idea to consult with a tax professional to ensure that you are taking advantage of all the credits and deductions you are eligible for.

• Do I need to make estimated tax payments? 

According to the IRS: Taxes must be paid as you earn or receive income during the year, either through withholding or estimated tax payments. If the amount of income tax withheld from your salary or pension is not enough, or if you receive income such as interest, dividends, alimony, self-employment income, capital gains, prizes and awards, you may have to make estimated tax payments. If you are in business for yourself, you generally need to make estimated tax payments. Estimated tax is used to pay not only income tax, but other taxes such as self-employment tax and alternative minimum tax.

If you don’t pay enough tax through withholding and estimated tax payments, you may be charged a penalty. You also may be charged a penalty if your estimated tax payments are late, even if you are due a refund when you file your tax return.

• Link to the IRS Frequently Asked Questions Page: https://www.irs.gov/refunds/tax-season-refund-frequently-asked-questions

California Taxes

• How can I track my California Tax Refund? - Where's my refund?

• How can I make a payment to the California Franchise Tax Board? - Make a payment