What to Do If You Missed the Tax DeadlinePublished:
Tips for Filing a Late Tax Return
This year, you had an extra few days to file your 2017 tax return, but what happens if you missed that deadline? If the April 18th due date passed you by and you still haven’t filed, there is no reason to panic. Life can throw hurdles in your way and if they happened in early April, you may have been distracted.
If you missed the tax deadline, you can still file a late tax return. Here is what you need to know:
Did You Owe Taxes?
First and foremost, did you owe Federal income taxes for 2017? If you do owe taxes, you should try to pay them as soon as possible. The IRS will continue to charge you with penalties and late fees until your tax balance is paid.
If you do not owe taxes, then you don’t need to be as concerned about filing your 1040 tax return after the deadline. The deadline is to avoid penalties for filing late, but the penalty is based on the amount you owe. If you don’t owe any taxes, then there is no penalty to assess because the penalty is a percentage of your unpaid tax balance (which is zero in this case).
Also, note that not everyone is required to file a 1040 tax return. If you have a tax refund coming, you could take your time filing your 1040 return – but it is to your benefit to get the money you are owed and to have a tax return on file for financial purposes.
Did You File a Tax Extension?
Ideally, you filed a tax extension request BEFORE the tax deadline. A tax extension gives you 6 more months to file your Federal tax return – however, it does not give you more time to pay your tax balance. If you file for an extension, you will avoid the late filing penalty. But if you don’t pay your taxes on time, you will be responsible for the late payment penalty and interest charges, which starts the first day after the deadline. Even a partial payment will reduce penalties and interest, but you should pay the entire balance if possible.
Note that an extension application (IRS Form 4868) must be filed on or before the original tax deadline in order to be approved by the IRS. If you owe money to the IRS, you can send your tax payment with your extension application.
Filing a Late Tax Return
If you owe taxes and you missed the deadline to file your 1040 return (and you didn’t get an extension), you should file your tax return as soon as possible. You should file your tax return even if you don’t have the money to pay all of your owed taxes. When the IRS processes your tax return, they will calculate what you owe – with penalties and interest – and send you a bill. Keep in mind that your tax debt will continue to grow until you pay it in full.
Some options to consider for making your tax payment include:
Credit Card – Many people find that it’s cheaper to pay interest on their credit card than pay penalties to the IRS. You can pay your taxes using your credit card through IRS-approved third-party vendors. For more information, see the IRS payments page.
Payment Agreement – If you can pay your tax debt in less than 120 days, the IRS will not charge you a set-up fee for a short-term payment plan. However, there are set-up fees for long-term payment plans. You can apply for a payment plan through the IRS.gov website.
There are some cases where you can avoid the penalties for late-filing and late-payment. If you can show reasonable cause as to why you were not able to file or pay on time, you may be able to have these penalties waived. However, it’s recommended that you file and pay your taxes as soon as possible, and then contact the IRS to explain your circumstances.
ALSO SEE: Federal Tax Payment Options