Did You Miss the October Tax Filing Deadline?
Let me check the calendar…there’s no way October 15th has come and gone! Man, is this year flying! October 15 is a black day in the souls of many, many men (that dramatic enough for you?). That’s the day that last minute filers who’ve already breezed through the original “last minute” date of April 17th this year without filing know: it’s The Big Day.
I Haven’t Paid Yet! Wasn’t My Money Due On the 15th?
Nope. Sadly, your money was due April 17th when you handed in that request for an extension. Forgot about the request, too? If you didn’t efile Form 4868, the automatic request for extension, you’ll have a few penalties:
- A penalty for failure to file. This penalty is 5% of the tax due per month late, up to a maximum of 25%. Ouch.
…but that’s not the only penalty. There’s also a separate one for the money you didn’t pay:
- A late payment penalty. This penalty is 0.5% for each month after the filing deadline that the tax isn’t paid. This amount, unlike the failure to file penalty, has no maximum.
If you don’t file OR pay, the late payment penalty is reduced by the failure to file penalty if both are due in the same month. The maximum amount in a month will be 5% (a reduced 4.5% for failure to file coupled with a 0.5% penalty for late payment).
What Exactly WAS Due on October 15th?
You must send in the correct paperwork for your financial situation to the IRS. Check the IRS website to determine the correct forms to file.
For more advice, check out our piece: Oops, I forgot to File My Taxes
Can I Receive Another Extension?
No. October 15th is the final day you can file without penalties.
What If I Can’t Afford To Pay My Taxes?
File anyway. First, your mom will be upset that you’ll be a wanted criminal (that was a joke…you’ll be breaking the law, but initially the sheriff won’t be sending a posse to your house….I think). Second, as I illustrated above, the penalty for not filing is more harmful (over the short term) than the failure to pay.
How Do I Calculate Penalties Due?
Don’t worry about that. In this instance the IRS has your back and will complete the helpful task of calculating the taxes on your behalf.
What Is My Best Course of Action Now?
1) File your taxes. Cut these penalties immediately.
2) Pay your taxes.
3) If you can’t pay in full, negotiate a payment plan if you owe less than $50,000. Use the IRS website Online Payment Agreement tool.
Owe a large tax you can’t pay? Read: How to Pay an Ugly Overdue Tax Bill
What if I Don’t Think I Owe the Tax at All?
1) Still file the correct form with the amount you think you owe to avoid failure to file penalties.
2) Attach a note detailing your concerns about the tax and why you don’t owe.
3) Complete a Collection Information Statement. You’ll need this form for any tax reduction to help prove you can’t pay the tax due.
4) Once you’ve heard back from the IRS, you’ll submit the Collection Information Statement and an offer-in-compromise form 656 with at least 20% of the tax due and a $150 application fee. (Low income filers may be able to waive the application fee.)
Photo: Tilemahos Efthimiadis