Just over a week ago, most folks were frantically trying to get some paperwork to the IRS. Some of you, though, decided to heck with it.
Although as I noted in this Associated Press story, you might have a bit of wiggle room when it comes to the April 15 midnight deadline, that leeway isn't available the longer you go without filing.
No, you can't ask for an extension now. The IRS will automatically deny any such request filed after midnight on April 15.
But don't freak out.
William Perez, the tax pro who pens About.com's Tax Planning: U.S., says filing your tax return after April 15 might not be a huge deal breaker.
Stop the penalties: The best advice from William and all other tax experts is to take care of your tax filing n as soon as you can.
The adage "better late than never" definitely applies to taxes. The worst thing you can do is not file at all. Even if you can't pay your tax bill, and that's why most people avoid filing, the IRS wants your 1040 anyway. In fact, the penalty for not filing your forms is tougher than for not paying.
The failure-to-file penalty is 5 percent per month, or part of a month, of the balance you owe. This can accumulate until it reaches 25 percent. The failure-to-pay penalty, on the other hand, is ½ of 1 percent of your unpaid taxes for each month or part of a month after the bill's April due date.
I guess the IRS
figures that once it knows what you owe and where you are, getting the
cash (or at least part of it) won't be that hard.
So if you haven't filed, do it now. That way you'll stop the penalty and accompanying interest charges that have been accruing since April 16. Once the paperwork is in, then you can figure out a way to pay.
Payment possibilities: You've got several payment options. Really.
Pay by credit card. I've got to remind you that in this case, you'll face interest on your card balance, as well as owe a credit card processing fee. But that 2.5 percent or so fee might now be deductible on your next tax return.
A better option, at least from the interest standpoint, is an installment payment agreement with the IRS. Whereas some credit cards charge 20+ percent interest, Uncle Sam's rates are much more reasonable. File Form 9465 to get this process started.
Plus, this year, the IRS says it will work with financially strapped taxpayers to help them meet their tax obligations without putting them into a deeper financial hole.
Get filing: But again, the key is to take care of your tax filing now. The longer you put it off, the worse your tax trouble will be.
Just ask the Utah attorney who hasn’t filed a tax return since the 1980s. The IRS finally caught up with him and he recently was fined $250,000, not to mention the $56,852 in back taxes he owed. Oh yeah, he also was sentenced to three years in prison.
Finally, remember that penalties are imposed only when you owe and don't get the tax cash and paperwork in by April 15.
So if you have a refund coming, what the heck are you waiting for!? File already!