Just a few days remain before the October tax filing deadline, so if you haven’t filed yet, it’s definitely time to do so now! If you aren’t sure why you should not let this deadline pass without taking action, here are a couple of very good reasons.
Penalties and interest charges are assessed against taxpayers who file late or not at all. Your extension was granted as extra time to file your tax return, but not extra time to pay the balance due. There are two penalties: Failure to File and Failure to Pay.
If you filed an automatic six-month extension for your 2012 taxes, October 15th is the deadline to avoid a very stiff penalty. The Failure to File penalty runs 5.0% per month plus interest on any balance due.
Failure to Pay penalty is the other one. However, if you filed for an extension of time and paid at least 90% of your actual tax liability on or before the due date of your return, and pay the balance when you file the return, relax – this penalty does not apply to you. Just remember you have to be paid-in-full by October 15.
The Failure to Pay penalty is applied when you have filed your tax return but didn’t pay the full balance owed. Beginning the day after taxes are due (for 2012 taxes the deadline is April 15, 2013), you will have to pay a Failure to Pay penalty of ½ of 1% (0.5%) of your unpaid taxes each month, or part of a month, after the due date that the tax is not paid.
While there is no penalty for Failure to File if you are due a refund, you cannot obtain a refund without filing a tax return. If you wait too long, you run the risk of losing it. In cases where a return is not filed, you generally have up to three years to claim a refund. For example, October 15, 2013 is your last chance to claim a refund due from 2010.
With efiling, nearly everyone can do their own taxes. Be sure to file only with a trusted and secure online service like Taxbrain, that also guarantees your tax return calculations will be accurate. Those who feel overwhelmed or want a little personal guidance can also get unlimited free live help when they use Taxbrain.
You may be putting off filing your tax return because you know that you owe the government money. Don’t let this fear cause you to miss the filing deadline. The IRS has several types of payment arrangements and other ways to help you pay the money you owe without a huge burden or inconvenience on your part. The IRS is willing to work with taxpayers, but you have to take the initiative to contact them first. If they have to come find you to get what is owed, they will be less willing to work with you.
When you file in October, you have already had an extra six months to get your tax return filed. Don’t miss this deadline; the headache and extra financial costs aren’t worth it. Get your tax return filed so you can move on with your life.