The deadline to file your income tax return is fast approaching, as April 15th is just five weeks away. If April 16th arrives, however, and you have yet to file your tax return, you may be worried about the penalties that you may be subjected to by the Internal Revenue Service (IRS). If you do miss the deadline, do not panic. Let us share a few ways that you can successfully file your return, while paying as little as possible in fines and penalties.
The first step is to request an extension from the IRS. Many people who file their taxes late do so because an emergency situation arises. While the IRS has discretion as to whether to grant you the extension, they are likely to grant you one if you have experienced a death in your immediate family, if you are going through a divorce, or if you are recently unemployed. You must, however, provide documentation to prove that you experienced one or more of these events on or before the April 15th filing deadline.
If you do not wish to request an extension, it is crucial that you file your tax return as soon as possible. The sooner you file, the lower the interest and penalties associated with your late filing will be. Keep in mind, however, that interest only applies if you owe the IRS taxes. E-filing is one of the quickest and easiest ways to submit your tax return. Various softwares, such as TurboTax, are cheap and easy to navigate. If you take advantage of e-filing, your return is received the same day. If you owe taxes, the IRS can fine you five percent of what you owe each month your return is late. The maximum amount of penalties that the IRS can apply is 25 percent, which can be a staggering amount on top of what you already owe.
If you are delaying filing your taxes because you are concerned about owing a large amount of money, we cannot stress enough how important it is to file anyway. There are various ways in which you can pay off what you owe, and it will be much more difficult to pay off an amount in addition to late penalties and interest. Making small, regular payments, or even considering taking out a loan to pay off your outstanding balance are just two of the ways you can accomplish this.
These are just a few tips to help guide you if you miss the tax filing deadline this year. If you have any questions or are in need of further advice about your taxes, do not hesitate to get in touch with our office.