Monday, April 19, 2010

What to do if you Missed the Tax Deadline

The deadline for filing your 2009 taxes was last week. If you are one of the millions of Americans who missed the deadline, then you may find comfort in knowing that you are not alone. In 2008, the IRS received over 9.5 million extension requests from taxpayers who were unable to get their returns filed before the deadline. Although you may face a penalty for filing your return late, it is important that you try to get your returns completed as soon as possible.

Can I Still Request an Extension?

The IRS will deny a request for an extension that is filed after midnight on April 15. Therefore, if you have missed the deadline, you need to file your tax return as soon as possible. Keep this in mind for next year; if you know you will not be able to finish your taxes before the deadline, you should always request an extension before the April 15 deadline.

Missing the Deadline

If you completely missed the deadline and did not file a request for an extension with the IRS, you need to act quickly and get your returns filed and pay any taxes you might owe. The longer you wait, the higher the late penalties will be. The failure-to-file penalty is 5 percent of the balance due per month. If your return is more than 60 days late, the minimum penalty is the smaller of $135 or 100 percent of the tax due.

The Danger of Rushing

Although, I advise you get your return filed as quickly as possible, it is important that you do not rush through the process of preparing your return. When you rush, you are more likely to make mistakes that could result in additional penalties. Always review your math carefully before sending in your return, and make sure to include your Social Security Number on any checks you write to the IRS. You definitely do not want your payment going to pay someone else’s tax liability!

Get Professional Help

If the thought of getting your returns filed causes you anxiety, then you may want to consider having a professional prepare your return on your behalf. This can help reduce the likelihood of a mistake and a tax professional can also get your return prepared and filed quickly. However, keep in mind that many tax preparation offices have seasonal hours so you should call and make an appointment as soon as possible.

Types of Penalties

There are two main types of penalties the IRS may assess on a taxpayer who files or pays late. They are failure to pay (FTP) penalties and failure to file (FTF) penalties. Oddly enough, the taxes for failing to file on time are often higher than those for failing to pay on time, so even if you cannot afford to pay the taxes owed, you should still file your return.

The Cost of Being Late

Late penalties for filing are normally 5% of the unpaid taxes for each month they are late. If you fail to file and fail to pay, the failure to file penalty will be reduced to the failure to pay penalty, which is 0.5% of your unpaid taxes per month.

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