Thousands of millionaires haven’t filed tax returns for years, IRS says
Thousands of millionaires haven’t filed tax returns for years, IRS says
The IRS said it stopped sending letters to people who didn’t file their tax returns, when the agency was strapped for funds. Now it’s going after the money.
About 125,000 notices will be sent to high-income earners, including 25,000 people with income more than $1 million, the tax agency said
This is who the Republican party's complaints about the IRS are intended to protect.
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Haven't filed tax return? So they don't want refunds? I'm confused.
If you're getting a refund, it's means you've been over paying and giving Uncle Sam an interest free loan.
I haven't gotten a (federal) refund in years. Every year I pay at tax time, so that money is sitting in my savings account for the year gaining interest rather sitting in the governments account gaining interest. We aren't talking a ton of money, but it's the type of game I can't help but play if it's available.
For the record, if your taxes are higher than a certain number you have to pay it every quarter, otherwise you will owe interest on it at the end of the year. So what EatATaco said is mostly true.
Sure, I should have made that clear that if you arent close, you'll pay a penalty.
Actual CPA here, you'll owe an underpayment of estimated tax penalty if you don't pay in at least the lesser of 90% of current year/100% of prior year (110% if AGI >$150K) tax. The penalty is based on the Federal short term rate and prorated based on amount underpaid and time outstanding (i.e. Q1 is overdue for the whole year but only 1/4 of the underpayment, Q4 is the whole amount but only late by one quarter). When all is said and done, it usually works out to like 2% and we have plenty of clients that would rather hold the cash and pay the penalty because it's generally cheaper than borrowing, or they figure they can get a greater rate of return by interesting it (depending on their situation/perspective).
If you miss April 15th it goes to credit card rates though (failure to pay penalty, which is very different from underpayment of estimated tax). Don't do that. Remember: an extension is for time to file, not time to pay.
The super-rich don't get much of their income from wages, where there is withholding of a bit more than you're likely to owe if the wages are your only income. They get it from interest, dividends, and running a business. There is usually not withholding for those, so they're supposed to make quarterly payments. But the Republicans cut IRS funding years ago, so it didn't have the resources to go after them if they just stopped paying. So a lot did just that.
People living anywhere less than 10 million aren't generally living off of dividends though either. Switching to that too soon is a common mistake many of the "merely rich" make.
Sure, but they're talking about people with income of more than 1 million. If they're living off interest and dividends, they've probably got something in the realm of $30-75 million in assets.
Point.