President Biden released his FY2023 budget which relies heavily on a new tax on unrealized capital gains, an idea that has been proposed in different iterations and pushed hard by Senate Finance Chairman Wyden during this administration.
Notably, this new version is dubbed as a “minimum tax” similar to the corporate “minimum tax” that passed in the House’s Build Back Better bill last year.
Any tax on unrealized gains could eventually pose big problems for the family businesses that we represent and TIA stands strongly opposed to this new version.
TIA signed onto this letter to President Biden, opposing his budget request.
The Internal Revenue Service reminds taxpayers that if they’re unable to file their tax return by this year’s April 18 deadline, there’s an easy, online option to get more time to complete their return.
Taxpayers who need more time to complete their return can request an automatic six-month extension to file. An extension allows for extra time to gather, prepare and file paperwork with the IRS; however, taxpayers should be aware that:
Individual tax filers, regardless of income, can use IRS Free File to electronically request an automatic tax-filing extension. The fastest and easiest way to get an extension is through IRS Free File on IRS.gov. Taxpayers can electronically request an extension on Form 4868. Filing this form gives taxpayers until Oct. 17to file their tax return. To get the extension, taxpayers must estimate their tax liability on this form and should timely pay any amount due.
Other fast, free and easy ways to get an extension include using IRS Direct Pay, the Electronic Federal Tax Payment System or by paying with a credit or debit card or digital wallet. There’s no need to file a separate Form 4868 extension request when making an electronic payment and indicating it’s for an extension. The IRS will automatically count it as an extension.
The IRS reminds taxpayers that a request for an extension provides extra time to file a tax return, but not extra time to pay any taxes owed. Payments are still due by the original deadline. Taxpayers should file even if they can’t pay the full amount. By filing either a return on time or requesting an extension by the April 18 filing deadline, they’ll avoid the late-filing penalty, which can be 10 times as costly as the penalty for not paying.
Taxpayers who pay as much as they can by the due date, reduce the overall amount subject to penalty and interest charges. The interest rate is currently four percent per year, compounded daily. The late-filing penalty is generally five percent per month and the late-payment penalty is normally 0.5 percent per month.
The IRS will work with taxpayers who cannot pay the full amount of tax they owe. Other options to pay, such as getting a loan or paying by credit card, may help resolve a tax debt. Most people can set up a payment plan on IRS.gov to pay off their balance over time.
Certain eligible taxpayers get more time to file without having to ask for extensions. These include:
The deadline to submit 2021 tax returns or an extension to file and pay tax owed this year falls on April 18, instead of April 15, because of the Emancipation Day holiday in the District of Columbia. Taxpayers in Maine or Massachusetts have until April 19, 2022, to file their returns due to the Patriots' Day holiday in those states.