Why the April deadline doesn’t matter for most taxpayers: Calendar dates like “Friday the 13th” and “Day of the Dead” don’t inspire nearly as much fear and anxiety as April 15th does. (You may also imagine that missing the deadline will throw you into the same category as anarchists and common criminals)
But should you really even care about the deadline? The answer to that may surprise you, and depends on one big question: are you expecting a refund?
You’ve gotta ask yourself a question: Do I expect a refund? (Well, do ya, punk?)
If you are like 3 out of 4 taxpayers, you will be getting a refund from the government after filing your Federal taxes. If you are part of this majority, then there is no penalty for missing the April 15th tax deadline. (This may differ for state taxes)
If you owe money, then April 15th does become important, because you may be on the hook for penalties based on the amount you owe the IRS, and how long it takes you to pay it. So, if you missed the deadline and do owe money, file your taxes as soon as possible to reduce the penalties.
How much is the penalty for missing the tax deadline?
Plan on a penalty of 5% of the amount due for every moth that you’re late in paying. So, if you owe $5000, and are 3 months late, that’s a $750 penalty.
If you are more than 60 days late, the minimum penalty is $100. (unless the amount owed is less than $100) The maximum late payment penalty is 25% of what you owe.
If you owe money, consider filing for an extension
Did you know that it’s really easy to file for an extension before time runs out on April 15th? Just file a form (usually form 4868) with the IRS asking for an extension. Using TurboTax software? They actually allow you to request an extension through the TurboTax Easy Extension available on their site.
The standard extension is 6 months, meaning that you may be able to push that deadline back to October!
So, why should I bother filing before the April 15th deadline?
There are some good reasons to file on time even if you don’t owe money. Here are a few:
- Filing on time means that you’ll get your refund faster
- You can be audited by the IRS for up to 3 years after the date of your filing. The sooner you file, the sooner that date passes
- Filing late may also subject you to fines for your State taxes
- May affect your eligibility for the premium tax credit
- Filing your taxes is patriotic and supports our military (true, but mostly just propaganda!)
- You probably won’t find any coupons for tax software after the deadline
What if i can’t afford to pay what I owe the IRS?
If you are filing late because you can’t afford to pay, you might just be adding to your problems. Even if you owe money, you should still file on time, even if you aren’t including a payment check with your return. In that case, you’ll want to consider an installment plan for the taxes that you owe.
In that case, attach an Installment Agreement Request Form 9465 with your return, and set up a monthly payment plan with the IRS. (see their website for details, including fees and interest on payments) Both TurboTax and H&R Block have resources to help answer specific questions as well. Don’t worry, over 2 million taxpayers pay in installments each year.
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