Tax Day was July 15th this year, after a 3 month extension due to COVID-19. If you still haven’t filed your 2019 taxes, you’ll need to contact the IRS for an extension – as soon as possible. You can find out more information and how to file for an extension at IRS.gov
Here are several reasons why it’s important to try to always file your taxes well in advance of the Tax Day deadline:
Possible Penalty Fees – Did you owe the IRS and your payment arrived late or got lost in the mail? You could be charged interest on everything you owe for late payments. Be sure to pay on time if you owe the government money to avoid any and all late fees.
You’ll Be Waiting for Your Refund – If you file late and are getting a tax refund this year, it’s basically withholding your own money from yourself.
You May Have Trouble Paying – If you owe money on your taxes, and it’s in the thousands – you unfortunately still need to pay by Tax Day. Filing late doesn’t give you any extra time to come up with your payment.
Underestimating the Time it Takes – Don’t underestimate the amount of time it takes to file your taxes, especially if you had a life change (marriage, new baby, changed jobs, bought a home) within the past year. It’s important to give yourself ample time before the filing deadline.
Not All Tax Forms May Be Available – It’s much easier these days with tax forms available online, but which ones do you need and how do you fill them out? Are you really sure you know exactly what’s needed and that it will be available if you need it right away? This requires advanced planning.
You Could Need More Information – You almost never have all the documents ready when you file your taxes. What happens if you need to locate an important form (like your W-2) or speak to your accountant, hours before the filing deadline?
Unexpected Things Happen – You may get sick or an emergency may come up. Also, what if you have a technology failure like your printer stops working or your computer won’t turn on? It’s always best to prepare and file early.
You Might Overpay for Advice – Sometimes, requesting last minute advice and service will cost you more. Plus if you’re in a time crunch, you won’t have extra time to find a discount or deal on tax services.
If you do end up filing late, here are some tips:
File for an Extension – If you can’t get your taxes filed by Tax Day, there’s always the option to file for an extension. The down side is that if you owe the government money, you’re still responsible for paying the estimated taxes when you file for the extension. In other words, it’s an extension on filing your taxes, not on paying what you owe. What happens if you can’t pay now? Failing to file for an extension will result in a penalty on top of the bill you already have. The IRS often offers an option to set up a payment installment plan. You can get started online here.
File Your Taxes Online – Filing online is faster and easier, especially if you’re running late. If you’ve never filed your taxes online before, a quick search will lead you to various tax prep businesses that usually offer free e-file along with paid services (like having your return reviewed by a tax professional). If your gross earnings fall under $69,000, you can also use the IRS Free File Program. E-filing requires an electronic pin you’ll use for e-signing, and also – don’t forget to save digital and print copies of your taxes for your records.
Watch for Mistakes – You’re more likely to make mistakes when you’re in a hurry to meet a deadline. The following mistakes are common and costly: Missed deductions, incorrect account or social security numbers, and forgetting to sign and date your return.
The moral of the story: File early next year!
Article Source: David Ning for Moneyning.com