If you haven’t yet filed your 2015 federal income tax return, you are probably starting to feel the pressure; perhaps you’re even starting to panic a little. After all, the filing deadline of April 15 is only days away. Hopefully, we can help alleviate some of your anxiety with these step-by-step last-minute tax tips to get you going. First, you need to determine why you haven’t yet filed (or perhaps even started) your return.
Are you missing required documents?
By now, you should have all of your required documents. If you don’t, you cannot use that as an excuse to not file your return. The IRS holds the individual taxpayer responsible for timely filing. So, right now, call the sender of the missing document and get a copy. With today’s technology, they should be able to email you a copy and get it in your hands today. Or you can request an extension, but only if it’s absolutely necessary. An extension is your way of saying to the IRS, “Hey, I am going to file my return but I need more time.” They will automatically extend your filing deadline until October 15, 2015. However, if you owe money, you do not get an extension on the deadline for paying it. This means that if you do owe money, and it is not paid by April 15, you may have to pay interest, and in some instances, penalties. By filing for the extension, however, if you do have to pay penalties, they may be reduced.
Read Related: Tax Breaks for Parents
Depending on how much, you have two options. If you think you’ll be able to pay the amount you owe, but just need more time to do so, you can set up a payment plan. If you owe $50,000 or less in combined tax, penalties and interest, and have filed all of your required documents, you can apply online. If you owe more than $50,000, you must apply the old fashioned way using IRS Form 9465-FS Installment Agreement and IRS Form 433-F Collection Information Statement. On the other hand, if the amount you owe is so large that you don’t think you’ll ever be able to pay it, or doing so will cause you financial hardship, you may wish to consider an offer in compromise. An offer in compromise is not guaranteed, and the IRS looks at the circumstances of your situation before deciding to accept your offer.
Perhaps you’re afraid you’ll make a mistake and the IRS will come after you and throw you in jail. We understand completely. It seems like the IRS has invented words and phrases to intentionally keep accountants and professional tax preparers in business. But the truth is, if you do make an honest mistake, they’ll likely just correct it for you and politely send you a letter to make you aware of any necessary adjustment. It may even work in your favor.
In addition, there are so many great software programs that will walk you through the income tax return process and help you avoid mistakes. And best of all, many of the software programs are available online for free if you meet certain age and income guidelines.
If you prefer the human touch, Volunteer Income Tax Assistance (VITA) is available in local communities to people who make $51,000 or less and require only basic income tax return preparation assistance.
If you don’t want to do it yourself and don’t meet any of the guidelines for free assistance, make an appointment with a professional tax preparer immediately. Don’t spend too much time trying to find the “best” one. At this point, you may be better off finding a reputable individual rather than using one of the popular franchises. They all use software and the end result is basically the same. Because it’s so close to the tax-filing deadline, and the chains are so busy right now, they may need to file for an extension on your behalf. Try to avoid this by finding someone not as popular who may have the time to prepare and file your return before the deadline.
Stuff happens, and sometimes unforeseen events get in the way of our best intentions. I don’t like encouraging people to put off the inevitable, especially when it may lead to additional taxes due (because of interest and/or penalties), but sometimes we have to pick between the lesser of two evils. The worst thing you can do is to prepare your own return at the very last minute.
Undoubtedly, you’ll be under pressure. And this is when most people take shortcuts, make mistakes, and overlook deductions. So, our advice? Request an automatic extension of time to file your return. And do it today. Just because you request the extension doesn’t mean you have to use it. But it will be there if you need it. And the pressure will be off.
Disclaimer: This post is for informational purposes only and not intended to provide legal or financial advice.