This year procrastinating South Floridians get an extra two days, like they did last year, because the usual deadline, April 15, falls on Sunday, and Monday is Emancipation Day, a legal holiday in the District of Columbia.
That gives South Florida taxpayers some extra time to digest a new wrinkle, the 1099-K form for Merchant Card and Third Party Network Payments.
If you received the new 1099-K federal tax form in the mail, take it seriously.
Otherwise, the Internal Revenue Service may come looking for you for not reporting income from online sales.
By the end of January, banks,Amazon.com, Pay Pal and other payment processors were required to report to the IRS on the 1099-K forms those sellers who took in at least $20,000 in gross sales and had 200 or more transactions. The new mandatory reporting helps the IRS spot any online merchants who aren’t paying federal income taxes owed on their sales.
It’s not designed to catch those South Floridians who sell a few books, Beanie Babies or an extra pair of Miami Heat tickets online for extra cash -- but for those who use the Internet for a more steady income stream, said Plantation accountant Sheri Schultz.
So far, few taxpayers have asked questions about the new form and how they should report income from their online sales, said Schultz and Mark Daily, who owns several Jackson Hewitt Tax Services franchises in South Florida.
Those who haven’t filed yet, “should get organized right now,” Daily said, so they have time to get duplicate receipts or other needed paperwork before April 17.
Some South Floridians may discover while filing their taxes that they owe money to the IRS, Schultz said. One reason: The end of the refundable Making Work Pay credit.
Unlike in 2009 and 2010, taxpayers won’t be able to deduct $400 off their 2011 federal income taxes for singles and $800 for couples, Schultz said. That may cause some taxpayers to owe Uncle Sam.
The IRS also has an new "Fresh Start Penalty Relief" initiative gives a break to some struggling taxpayers who owe taxes.
South Floridians who have been unemployed 30 consecutive days in 2011 or this year, until the April 17 tax filing deadline, can get a six-month extension to fully pay 2011 taxes without a penalty, said IRS’ Dobzinski. Self-employed workers who saw their business decline 25 percent or more in 2011, also can get the extension.
You will still owe interest, but you won't face failure-to-pay penalties if you pay your tax, interest and any other penalties in full by Oct. 15, said Dobzinski.
“This could save in some cases up to 25 percent of the money owed,” he said.
Taxpayers who qualify need to complete a new Form 1127A to request the 2011 penalty relief. The new form is available on irs.gov or by calling 800-829-3676.
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