Oops.
You didn’t mean to but you ran out of time . . . you just couldn’t get your 2012 federal tax return filed by April 15, and, like it or not, that deadline has come and gone.
Not good.
Okay . . . what’s done is done . . . so, what can you do now?
You need to consider the following:
You’re not the first and definitely will not be the last good American to miss the April 15 tax filing deadline so let’s consider how to proceed.
- If you have a refund coming to you, you won’t be assessed a penalty for filing late. However, the sooner you file, the sooner you’ll get your refund check. By the way, if you do have a refund coming and you fail to file your return within three years of the due date (April 15, 2015 for 2012 individual tax returns), you likely will forfeit your right to that refund.
- If you do owe taxes, every day you delay filing your return and paying your tax bill will only increase the amount of interest and/or penalties you’ll ultimately have to pay. By the way, the IRS may consider reducing penalties if you can prove you had reasonable cause (illness, death in the family, etc.) for filing late.
- Filing your tax return by the due date (which can be extended an automatic 6 months by filing Form 4868, can save you a boatload in penalties. The penalty for filing late is normally 5 percent of the unpaid taxes for each month or part of a month that the tax remains unpaid. This penalty starts the day after the due date of the late filed return and can go as high as 25 percent of the tax due. So if you file your return on May 1 instead of the April 15 due date, you will incur 2 months of penalties and pay an additional 10% in penalties.
- While the IRS will assess you failure to pay penalties and interest until the tax liability is paid in full, that penalty can be significantly less than the failure to file penalty. The IRS penalty for failure to pay is ½ of 1 percent of your unpaid taxes. This penalty begins the day after the tax-filing due date of April 15 (not the extended due date if an extension to file is requested) and applies for each month or part of a month until payment is made. If you do not have sufficient funds to pay your taxes in full on April 15, making a reduced payment will decrease your penalty assessment as the penalty is based on the unpaid liability as of April 15. You can also call the IRS and request a payment plan once you file your return.
- Your best course of action may be to immediately contact a tax professional who not only will help you file your return quickly and accurately, but will know whether you’ll be charged interest and penalties and will also know what your payment options may be. Having the right tax pro on your side at a time like this can save you money and will certainly help you feel a whole lot better about having missed the April 15 deadline.
- If you have not filed your tax returns for several years or have not paid your taxes in full for several years, you need to consult with a tax professional to see if you qualify for one of the IRS’s “Fresh Start” programs to bring taxpayers into compliance.
Note: Because each person has unique needs and because tax laws are subject to change without notice, we invite you to call 610-594-2601 today to make an appointment to discuss your particular tax situation.
The author wishes to thank BusinessWriters.Biz, a marketing company, for its contributions to this article.
Copyright © 2013 Keystone Financial Solutions, P.C. All rights reserved. BE SURE TO READ THE DISCLAIMER PAGE: Content in this blog is for educational purposes only and should not be considered as the rendering of tax, legal or investment advice. The publisher of this blog makes no representations as to the accuracy or completeness of any information herein, will not be liable for any errors or omissions, and shall not assume liability for any losses, injuries, or damages from the display or use of this information.
