Do you wait until two weeks before the deadline to file your tax return?
It's almost time for you to get started then - we only have 4 weeks left before this year's tax deadline!
Last minute filers typically fall into two categories: Either they owe the IRS money, which removes any incentive to file early, or they’re procrastinators who would go have dental work than prepare their tax returns.
This year, the calendar is the procrastinator’s friend. April 15 falls on a Sunday, and because April 16 is a holiday in Washington, D.C., you have until Tuesday, April 17, to file your federal tax return.
If You Don’t Owe...
If you’re due a refund, there’s no reason to sweat this deadline. The IRS will gladly hold on to your money until you get around to filing your return.
There are instances in which you should file on time or file an extension even if you don’t owe the government money. If you converted a traditional individual retirement account to a Roth IRA in 2017, you have until October 16, 2018, to undo the transaction and avoid paying taxes on it. But to qualify, you must file your tax return or request an extension by April 17.
File for an Extension?
Filing for an extension will give you until October 15 to file your tax return. Approval is automatic. Use IRS Form 4868 to file your request. Most tax software programs provide this form.
Filing for an extension gives you more time to file your return, but it doesn’t give you more time to pay taxes you owe.
If You Can't Pay...
If you can’t come up with the money by April 17, you should still file a tax return or request an extension. Otherwise, you will get hit with failure-to-file penalties, along with underpayment fines and interest on the balance.
If you need just a little more time to come up with the money, you can ask the IRS for an additional 120 days to make your payment. There’s no fee to set up this agreement, although you’ll owe interest and other fees on the balance until it’s paid off. To request an agreement, call 800-829-1040.
If the amount you owe is large and you can’t pay by April 17, consider requesting an installment plan with the IRS. With an installment plan, you can make monthly payments until the balance is paid off. Taxpayers who owe $50,000 or less can apply online. You’ll have to pay a set-up fee of $225 (or $107 if you arrange for direct debit from your bank account).
Another option is to pay taxes with your credit card. This may appeal to taxpayers who would rather owe money to Visa or American Express than the IRS, especially if they have rewards cards. But while the IRS will accept payments via credit card, it won’t pay the “convenience fees” credit card companies charge retailers. Fees range from 1.87% to 2% of the balance. If you use tax software to e-file, the fees are even higher: TurboTax charges a 2.49% convenience fee. If you don’t pay off the balance by the credit card due date, you’ll also owe interest.
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Hi! I'm Jaimie and I have a B.A. in Accounting, an MBA with an emphasis in Accounting and a CPA license. I worked for about 10 years in CPA firms doing audits and reviews and then for about 10 years in private companies managing accounting departments. I've learned a lot about accounting, finances and taxes over the last 20 years! And now I want to share my knowledge with you here!