Hopefully, we will all manage to report our taxes by Tuesday, April 17. However, we sometimes just goof on these important deadlines and have to scramble to make it right.
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We are only human (As Rag N’ Bone Man reminded us on his track “I’m Only Human”) and, as humans, sometimes we just plain mess up. With that in mind, if you suspect that you may not make the tax deadline this year, that you don’t have your paperwork in order (maybe your dog ate your paperwork) or that you haven’t found all your forms yet, then there is still some damage-control that you can do to stay out of hot water with the IRS.

 

First things first: File your extension

 

Again, sometimes stuff happens. But no matter if you are missing essential documents, your work life has been extremely hectic, or you are dealing with a difficult life event, the IRS is going to expect you to give some sort of an explanation. You definitely cannot go AWOL on your taxes. But the IRS tends to be relatively understanding provided you go about being late the right way. In this case, the right way is filing an extension.

 

Extensions allow you to push your deadline back six months to Oct. 15, 2018. Important caveat: An extension allows you to push back the date by which you need to have your documents sent in. It does not allow you more time to pay those taxes that you owe.

 

Option 1: E-Filing: TurboTax Easy Extension can help you out with getting your extension in pretty easily. They will help you e-file for extension and make a payment of any taxes that you owe directly from your checking or savings account. They will also send you a notification if and when (hopefully just when) your extension has been accepted by the Internal Revenue Service.

A Note: If you’re expecting a refund, it will not be processed until you have completed your tax filing.   

 

Option 2: Print and mail your completed IRS extension form: If you’re more of a DIY-type, then you would simply refer to the IRS Form 4868: Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, complete and print the form, and send it to the IRS address for your state.

A sad note: If you do not file an extension by the tax filing deadline, this unfortunately means that you will have to pay a failure-to-file penalty: 5 percent of the amount of taxes you owe for every month your return is late, up to a maximum of 25 percent. The penalty for filing late is 10 times higher than the penalty for paying late.

 

You should pay what you can!

 

It might be tempting to hide in a hole if you can’t pay your taxes in full, but this is actually a bad decision. It will mess you up even more, and the hole will just grow deeper. Instead of locking yourself in your apartment with a container of Ben & Jerry’s, you can be proactive about this and simply pay what you can manage. The more you pay, the less the penalties will be, so you might as well do your best to minimize those penalties as best you can. The IRS provides installment agreements for both individuals and business owners that are worth looking into (your eligibility usually depends on the amount of taxes that you owe.) Although penalties will still be on the table, paying at least something will prevent you from becoming subject to any additional collection actions. In other words, you can stop the good people of the IRS from knocking down your door.

 

You might have special circumstances

 

The IRS will sometimes cut you slack if you have a really good reason for being late. Really good. For example, If you’re a U.S. citizen and you’re out of the country at the time of the filing deadline, then you’re automatically granted two additional months to file your return and pay any taxes due. You won’t even incur late-filing penalties. Additionally, for situations beyond your control such as, I don’t know, major surgery or unforeseen events that made it necessary for you to travel to Zimbabwe, the IRS will give you a pass on that too, usually. Well, not exactly a pass, but there is a good chance that if you report the situation to the IRS, they will waive all your penalties.

 

You really can’t not do it

 

Stupid point I nonetheless must make: If you are considering just not paying, I strongly recommend against that. It may be a week, six months, or three years, but the Taxman will come knocking at your door, and you will not like what they have to say. Typically, you’ll receive a letter notifying you that you have an outstanding tax liability. By this time, you’ve already racked up hundreds or even thousands of dollars in penalties, interest and late fees. Also, there are a ton of things the IRS can do to make your life nightmarish, including auditing you and putting a lien on your property. So it is wise to do your very best to be on the IRS’ good side.

 

Takeaway

 

If you feel that you just are not going to make the April 17 tax deadline, then that is not the best news obviously. There is no getting around this fact. However, it doesn’t have to be dire news, and there are some things you can do to minimize the unpleasantness for yourself. Whatever you do though, don’t think about hiding from the IRS. They are excellent at hide-and-seek and they will find you.

 

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Header image: AdobeStock

 

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Posted 04.16.2018 - 10:00 am EDT