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.

9 Very Last Minute Tax Preparation Tips

April 15^th is just a few hours away, and millions of Americans are rushing to get their tax returns filed on or before this Thursday. To help any of my readers who are trying to beat the deadline, I have put together this list of tips to get your tax returns prepared on time.

1. Use your Tax Return from Last Year as a Guide

Before you start working on your new tax return you should go and find your tax return from last year. Unless your financial situation has changed drastically over the past year you should be able to use your old return as a guide for completing your new return.

2. To Itemize or Not?

Itemizing your return opens up the door for dozens of tax deductions, although taking the standard deduction is easier, itemizing your deductions may be more tax beneficial to you. If you do not know if you would benefit from itemizing or the standard deduction then you might want to speak with a qualified tax professional.

3. Consider an IRA to Lower your Liability

If you are looking for a last minute way to lower your adjusted gross income from last year, then you should consider making a contribution to a traditional IRA. As this article on the RDTC Tax Help Blog explains you can make retroactive contributions to an IRA up until the tax deadline to lower your taxable income for 2009.

4. Making Work Pay Credit

This year there is a new $400 Making Work Pay Credit for most taxpayers who worked during the last year. You will need to complete Schedule M to calculate the value of your credit. For more information checkout this IRS press release from earlier today.

5. Be Honest and Review Everything Twice

One of the most important rules of preparing a tax return is to always be honest. The repercussions you may receive for lying to get a deduction you do not qualify for could be a lot more than you would have saved. You should also give yourself time to thoroughly review your return for errors before filing.

6. E-Filing your Return

You should always try to e-file your tax return, unless you have a legitimate reason not to. E-filing is fast, and can get your return to the IRS in a few minutes. Plus, you can avoid both the drive to the post office and having to pay for shipping.

7. Direct Deposit / Splitting your Refund

When you file your return, even if you do not e-file, you can select to have your tax refund directly deposited into your bank account. You can even have the refund split between multiple different accounts.

8. Consider an Automatic Extension

If you are not quite ready to file – for any reason – you should file for an automatic extension from the IRS. There are numerous reasons you may feel the need to file an extension, but any reason is better than not filing your return at all. However, if you are going to owe the IRS money then you still need to have your payment to them by the 15th.

9. Get Professional Help

If you are confused, or worried about getting your return completed by the deadline then you might want to enlist professional help. However, if you are going to get help from a tax preparer then you will want to make an appointment as soon as possible. Even if you do file an extension, you should make an appointment to get your return completed shortly after the tax deadline as many tax preparation offices close during the off-season.

7 Easy Steps to an Early Tax Refund

As you know, I am a champion for ending your “refund addiction”. By that, I mean, adjust your withholdings so that you don’t receive a fat check in April or May, but rather get the money spread throughout the year. Remember, getting a refund should be a reminder that you have been loaning the government money interest-free throughout the year.

That being said, if you are – or anticipate – being due a refund, the sooner you do finish preparing your return, the sooner you will get it. Additionally, by filing early you can sit back and relax while most of Americans are rushing to beat the tax deadline. MSN Money shared 7 helpful tips for getting an early refund, while still being accurate. You can check out a snippet of the blog entry below.

So, if you want to get your 2009 taxes in early and get your refund quickly, here are Schnepper's Seven Strategies to getting those dollars in your pockets ASAP. Here's what you have to do:

1. Get started

The first step is the hardest. Stop thinking about it and get moving. Until you actually start your return, you'll never finish it. That's probably going to slow down your refund.

If you don't have all your numbers, just put your name and address on the form. It will get you in the mind-set to move forward.

Your first step is to break the inertia. As my father used to say, a trip of a thousand miles begins with a traffic jam! Break that jam and get moving.

2. Accumulate the data

January is collection month. By the second week of February in 2010, you should have the numbers in hand. Make sure you've gotten W-2s and any statements from your brokers and banks. You'll receive 1099 forms for any interest, dividends and stock sales.

Your mortgage company will send you a Form 1098 for any interest and real-estate taxes paid. Get those statements together and review the numbers. They're not always right. They won't include any interest you paid the very end of December because the creditor won't have received the money until 2010.

Tax Day Roundup: Filing Tips and Free Food

Yesterday I came across this great article from LifeHacker.com with some last-minute preparation tips for filers who are late or planning to file an extension today. They also included some information on a few tax day freebies and discounts. You can find a segment of the story below, thanks to LifeHacker.com.

Last Minute Prep Tips:

Need an extension?: If you know roughly how much you'll owe but just can't get through all the paperwork, fill out Form 4868 and send it in with 90 percent of your estimated amount due to avoid penalties and fees. Pretty sure you're getting a refund? Just send in that form, and you've got until around Oct. 15 to file your final claim.

Drop-dead, last-minute tax reducers: If you can't stand to look at how much you owe, today's probably the last day to do something about it. Grab that extension form above, unless you've got the day to yourself (or love late-night post office crowds). Then check out Consumer Reports' Last, best money-saving tax options, which includes things like Roth IRA contributions, child credits, and stimulus payments that never came.

Clean, signed, and keep a copy: That's how tax returns should be filed, as tax whiz Roni Deutch tells the Get Rich Slowly blog. Just having a proper-looking return can keep you away from an audit, but if the numbers themselves make you worry, check out GRS' list of common IRS red flags.

Tax Day Freebies and Deals:

Cinnabon Bites at mall-based Cinnabon locations from 5-8 PM.

Single-scoop ice cream from MaggieMoo's all day.

Free Taco Del Mar Taco all day with a printed coupon.