While no one on my mailing list would dare miss an important tax deadline, what would happen if you did? The penalty on not filling is actually much worse than if you file and don’t pay your share, so first things first, get that return in pronto! Depending on if you’re owed a refund or need to pay, the steps to process your late return vary.
If you’re owed a refund
This situation is more ideal, as you won’t be penalized for filing a late return. However, don’t wait too long as the IRS only allows you to e-file your late return until October 15, 2018. After that you will need to submit a paper return. And if you continue to wait, the IRS could file a substitute return for you and they likely will not include the proper deductions and credits, turning your refund into debt owed.
If you owe money
This situation is much trickier, as the penalty for not filing is much more serious than if you file and do not make a payment. In fact, the penalty is 10 times worse—you’ll pay a penalty for each month (or part of a month) you’re late. The penalty equals 5% of the unpaid balance on your taxes, with a maximum penalty of 25% of the unpaid tax balance. If you’ve failed to file and missed the deadline by more than 60 days, your minimum penalty is the lesser of 100% of the unpaid taxes you owe or $210. In some instances, a taxpayer filing after the deadline may qualify for penalty relief. If there is a good reason for filing late, you should attach an explanation to the return. Alternatively, taxpayers who have a history of filing and paying on time often qualify for penalty relief. A taxpayer will usually qualify for this relief if they haven’t been assessed penalties for the past three years and meet other requirements. For more information, see the first-time penalty abatement page on IRS.gov.
Act fast
No matter what the situation, be sure to act fast. The longer you delay the greater the consequences and the financial impact.
Need help organizing your information for getting your filing completed? Call me at 720.352.7040 and I can help you get the details compiled.
Important Dates
While your first quarterly tax payment should have been made on April 15th, here are a list of important tax dates through the end of the year.
June 15, 2018
- 2nd Quarter 2018 Estimated Tax Payment Due
If you are self-employed or have other second-quarter income that requires you to pay quarterly estimated taxes, make sure your payment is postmarked by June 15, 2018 tax deadline
September 17, 2018
- 3rd Quarter 2018 Estimated Tax Payment Due
If you are self-employed or have other third-quarter income that requires you to pay quarterly estimated taxes, make sure your third quarter payment is postmarked by Sept. 17, 2018 tax deadline.
October 15, 2018
- Extended Individual Tax Returns Due
If you got a filing extension on your 2017 tax return, you need to get it completed and postmarked by October 15, 2018. - Last Chance to Recharacterize 2017 Roth IRA Conversion
If you converted a traditional IRA to a Roth during 2017 and paid tax on the conversion with your 2016 return, October 15 2018 is the deadline for recharacterizing (undoing) the conversion. Doing so could save you money if the IRA has lost money since the time of the original conversion.
Resources
Missed the tax-filing deadline? IRS issues tips on what to do; April 23, 2018 by Internal Revenue Service
Important Tax Deadlines and Dates; Updated for 2017 tax return period by Intuit Turbotax