Remember that tax extension you filed this past spring to pay late? Back when you thought you had lots of time before you had to really worry about doing the paperwork? Well, the “tax day of reckoning” is almost here and the deadline to file is Monday, Oct. 16.
The extension deadline applies to individual tax returns for 2016 and includes 1040, 1040A, 1040EZ forms. Remember, filing is different than paying. If you think you owed for 2016, you should have already sent your check, which covered your estimated taxes to the IRS, by April 18 — even if you did not submit the paperwork. And although you already paid, you still have to complete and submit the appropriate tax form, which you can either access from the IRS website or through your tax software.
What if I don’t file (or pay) 2016 taxes in 2017?
First, the good news: if the IRS owes you money — and most taxpayers get refunds — there is no penalty for filing late. (Although giving the IRS any more of your hard-earned cash than it deserves isn’t a great money move.)
If you did owe money, however, and forgot about the filing deadline until now, you’ll probably be alright as you have a week to complete your returns. But make no mistake — if you simply don’t file, even if you already paid the estimated taxes, you’ll owe the IRS even more money, which accrues interest the longer you blow it off.
The “failure to file penalty is about 5% of the tax owed for each month, or part of a month that your return is late, up to a maximum of 25%. If your return is over 60 days late, there’s also a minimum penalty for late filing; it’s the lesser of $205 or 100% of the tax owed,” according to the IRS.
What happens if the deadline passes and you are still racing to get your taxes filed? “You can still file, but you have to do it by paper,” Lisa Greene-Lewis, a certified public accountant and tax expert for TurboTax said.
Whatever you do, don’t ignore or try to cheat Uncle Sam. Telling the IRS you “forgot” or “didn’t know” isn’t an excuse for not filing. Beyond having to pay penalties, if the IRS determines that you willfully filed fraudulent returns, you could wind up serving jail time, Business Insider reported.
How to file taxes right now
Avoid any of the harrowing scenarios where you have to pull an all-nighter and dive in right now. If you are filing electronically, IRS e-file or free file is still available, or you can use tax software. You can still file your taxes free of charge using free file if your annual income is $64,000 or less.
Need help? The IRS’s Volunteer Income Tax Assistance program offers free tax help to people earning $54,000 a year as well as those with a disability or if you need help with forms due to limited English.
The IRS also reminds Oct. 16 filers that they may need to take their adjusted gross income from their 2015 return to electronically file their 2016 return. To locate the AGI on your 2015 returns, look on line 37 of Form 1040; line 21 on Form 1040A or line 4 on Form 1040EZ. If you don’t have a physical copy, look for a copy in your tax software or ask your preparer for a copy.
Don’t forget to take deductions and credits. “One deduction people often miss is to deduct state or local income taxes on their federal return,” Lewis said. “Also, don’t forget about the charitable contributions, even the smaller ones you made during the year.”
You should also tick off easy ones like taking the deduction for a home office, contributions to your health savings account and claiming the earned income tax credit for those who made $14,880 or less in 2016. “The average earned income tax credit was close to $2,500 last year,” Lewis said.
Lastly, don’t forget to sign and date your returns or the IRS won’t accept them.
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