April 15 came and went without you.
Maybe you had a good excuse for not filing. Much better, I hope, than this guy's glib offering at Twitter's #TaxDayExcuses:
But if you are part of that group, you also need to do something about your oversight ASAP.
Accruing costs: The bottom line is that despite your reasons for neglecting your Tax Day duties, it's likely costing you.
When you don't file your annual federal tax return -- and pay any tax due -- by April 15, you could end up owing more money in penalties and interest.
The law generally doesn't allow the Internal Revenue Service to waive interest charges. However, the IRS will consider a reduction of penalties if you can show a reasonable cause for being late.
3 late-filing moves to make: To stay on Uncle Sam's good side and save as much money as possible, here are three things you should do if you missed the filing deadline.
- E-file: Sending your return electronically is the fasted way to get it to the IRS. As soon as it's accepted -- and you've paid your due tax -- the penalties and interest stop. Free File is still available if your adjusted gross income is less than $58,000.
- Pay as much as you can: Even if you can't pay your tax bill, go ahead and send in your 1040. The penalties and interest are assessed separately for not filing and not paying. At least you'll stop the nonfiling charges. But if you can pay anything at all, do so. Again, that will reduce the amount on which the nonpayment charges are figured.
- Set up an installment plan: To deal with what you still owe, you can set up an installment payment plan directly with the IRS. You can file the paper Form 9465, Installment Agreement Request, or apply online using the IRS' Online Payment Agreement Application.
IRS filing for you: If you insist on not filing, the IRS might just do it for you by filing substitute return with your information, or as much of it as the agency has.
It will base your income on copies of your W-2 and 1099 forms it receives from payers.
The substitute return, however, won't give you credit for deductions and exemptions you may be entitled to claim.
Once the IRS files a return in your name, you'll get a Notice of Deficiency CP3219N (90-day letter) that will tell you how much tax the IRS says you owe.
You can forestall this action by filing your own tax return with all the exemptions, credits and deductions for which you are eligible. Upon receiving your actual return, the IRS will generally adjust your tax account to reflect the correct figures.
Expecting a refund: Finally, if you didn't file a 1040 but are getting a refund, what are you thinking?
True, there isn't a penalty for not filing in this case. The penalties are calculated as a percentage of what you owe and any percentage of zero is zero.
But you should file to get your money ASAP. Remember, if you neglect to file for a refund for more than three years, you'll forfeit your refund.
What's your excuse? The guy who wasn't invited to Tax Day via Facebook isn't alone in offering social media excuses for not filing.
Here are few excuses for which there are tax answers.
That is correct, Chris. You cannot claim any pet as a dependent. Sorry.
Some folks in specific situations, however, might be able to claim a few pet-related tax deductions.
If you work in a profession where gratuities are a standard part of your compensation, such as a taxi driver or hairdresser or restaurant servers or, like Sugar, an apparent exotic dancer, those tips are taxable income.
This tax law applies to noncash tips. The value of those Red Sox tickets your client gave you counts as income for tax filing and payment purposes.
Under-the-table payments are the bane of not only the IRS, but all law-abiding taxpayers who are reporting all their income even if they didn't get an official statement regarding the payment. We're all picking up the slack for these tax-evading folks.
Taxes apply to illegal income, too. Remember Al Capone. Despite arguments by relatives that Scarface was a tax victim, he ended up in Alcatraz not because of alleged violent actions, but because he didn't pay tax on his illegal earnings.
Ben Franklin was right, Gideon. Death and taxes are among the only certainties in life. So don't make a choice this April, especially not for the former!
And don't worry about the ultimate tax situation. In most cases, very few of us end up owing federal estate taxes.
Even if we're close the current $5.34 million estate value exemption (which is adjusted annually for inflation), we can take steps such as giving away some of our wealth now to reduce what might be owed when we're gone.
What's your nonfiling excuse? If it's not much, much better that these Twitter offerings, you best get to filing your 2013 return now!