Don’t let April Taxes be the Death of You

The month of April brings many wonderful things to us here in the Tri-State region, including warmer weather, Easter egg hunts and spring flowers. However, it also brings the dreaded tax deadline for those who wait until the last minute to take care of this annual ritual. This year, April 15 falls on a weekend, which gives taxpayers a couple extra days to file (April 18). But what happens if you are late in paying your taxes?

• File as soon as you are able – While missing the deadline is not advisable, if it happens, don’t panic. File your return as soon as you can to help minimize any interest payments or other penalties. If you are late and do not owe taxes, you will not be assessed a penalty.
• Use IRS Free File – This handy option from the IRS allows anyone to electronically file their taxes for free. Incomes under $58,000 can use free online software. Individuals who owe more than $58,000 can use Free File if they are comfortable filing their own tax return. The Free File from the IRS is available at IRS.gov through October 15, 2017.
• Pay what you are able – If you owe taxes but are unable to cover the entire amount, pay what you can when you file your return. The balance owed should be paid as soon as possible to avoid any penalties or added interest.
• Make a plan – Sometimes circumstances make it difficult to cover what is owed. If you need additional time to pay, you can file for a payment plan with the government. This can be applied for online at IRS.Gov or can be mailed in using the IRS form 9465 for an installment agreement request.
• You may still get money back – If you failed to file taxes in the past, you may still have a refund waiting for you. File as soon as possible and apply it to the amount owed on your current tax bill. Remember, if you fail to file taxes for more than three years, you might forfeit the right to claim your refund.

The South Sioux City Chamber of Commerce is here to help area businesses grow while promoting economic development in the Tri-state area. Come celebrate the achievements of area business professions at the Business Awards Luncheon, May 9 at the Camp Goodwill Achievement Center.  

Are Taxes Too High?

The question of taxes being too high is one that comes with a plethora of responses and sometimes a great deal of controversy. A recent article in the Wall Street Journal suggests over half of Americans (57%) feel that income taxes are too high. However, there are mixed reports regarding how US stacks up to other countries around the world.  

US Tax Burden Low

The Organization of Economic Cooperation and Development (OECD) suggests the US is among the lowest taxed countries worldwide. While the individual tax burden in the US has been slowly increasing over the past few years (0.6 percentage points from 25.4% to 26.0% in 2014), when looking at the figures since the year 2000, there has actually been a decrease in the tax burden (from 28.2% to 26.0%).

US Statutory Corporate Income Taxes High

While the US individual tax burden is relatively low when compared to other countries, corporate tax rates are among the highest worldwide. In a report put out in the fall of 2015, the United States ranked third highest when evaluating the corporate income taxes of 173 developed countries around the world. The US’s 39% statutory corporate income tax rate tied with Puerto Rico and was exceeded only by the countries of Chad at 40% and the United Arab Emirates at 55%. By comparison, the average corporate tax rate for all countries included in the survey was only 22.9% or 29.8% when weighted by Gross Domestic Product.

Understanding the numbers

What makes the corporate income tax statistics a bit muddy is the fact that many US businesses do not pay even close to their entire tax bill because loopholes in the US tax codes often provide significant breaks. In fact, the latest statistics from the Government Accountability Office suggests that most companies only pay an average of 12.6% in corporate income taxes. Many of these deductions come from the purchase of foreign subsidiaries or other investments in off-shore organizations.

So, again we ask the age-old question – “Are taxes too high?”  The answer – “It depends on who you ask.”  What we can say for certain is that while the tax burden for US citizens is low, smart business owners should investigate all their options before filing their annual tax bill. For up-to-date news and relevant information on the South Sioux area, please visit our website and follow our blog!

Sources:

http://blogs.wsj.com/economics/2016/04/18/57-of-americans-say-their-income-taxes-are-too-high-only-55-5-pay-income-tax-what/ - :pr7Nj2Z4NGPEXA

http://taxfoundation.org/article/corporate-income-tax-rates-around-world-2015

http://www.cbsnews.com/news/expert-debunks-claim-us-corporate-taxes-are-high/