April 15 is here! However, taxes aren’t due until April 18 this year!
If you can’t finish your taxes on time, relax. You have options.
If you don’t have your documents in order or haven’t made real progress on your tax return yet, filing for an extension by April 18 sounds like a good idea.
Did you know that about 12 million people file an extension each year, according to the IRS.
However, getting more time isn’t as simple as it sounds.
Here are seven things you should know if you can’t finish your taxes on time:
1. You still have to act by April 18. The paperwork is still due on April 18!
2. If you owe money, you have to pay. You’ll need to fill out enough of your tax return to come up with a rough estimate of what you owe. And, send the amount owed to the IRS on time!
3. Failing to file is worse than failing to pay. You don’t want a failure-to-file penalty. It is usually 5% of the unpaid taxes for each month or part of a month your return is late, up to 25% of your bill. Beware…there’s an increase in penalties for tax year 2015 for a failure to file correct information returns and provide correct payee statements for information returns. Yikes!!
4. Your bank may be kinder than Uncle Sam. You may want to pay your taxes with a credit card if you don’t have the cash on hand. The interest and fees may be less.
5. You may not need an extension. File your completed return and pay what you can. Request a short extension of 60 to 120 days to pay. The IRS provides installment payments.
6. If you are owed a refund, you won’t be penalized for not filing. However, you won’t get your refund until you file your return. So, get your money ASAP!
7. If you’re a chronic procrastinator, the IRS won’t issue your refund. If you don’t do your taxes for three years, even if you’re owed a refund, the IRS will keep your money. Again, Yikes!!
Can’t Finish Your Taxes on Time? – There are Solutions!
Source: Tax Filing Extension