Four Steps To Take When You're Late On Your Tax Return
Sometimes it may just not be possible to finish your tax return on time. Whether you're still missing documents or the deadline just evaded you, you need to take action fast. Here are the four steps that you should take immediately after missing your filing date.
1. Get Your Documents Together
In addition to your prior year tax return, you should collect all of your bank statements and tax documents. Compare all of the forms you have to your last year of paperwork to make sure you have everything that you should. This will help you avoid any unpleasant situations, such as finding out you're missing a vital document once you finally go to complete your return.
2. Look for Exceptions
There are certain exceptions to late filing penalties. If you could not have filed your taxes on time due to undue hardship or mitigating factors, you may be able to explain this to the IRS. For instance, a natural disaster or a serious medical issue may have made it prohibitively difficult for you to file. If these reasons are rejected by the IRS, you will simply be required to pay as normal -- so it usually doesn't hurt to try.
3. File Without Payment If You Can
Some people choose not to file their taxes because they aren't able to make payment. Filing your tax paperwork is actually separate from filing payment -- you can do one without the other. If your tax return has been completed, you should still send it in even if you can't pay. You can request a payment plan at this time if you want to; the IRS is usually fairly lenient regarding financial options. In general, the penalty for filing late is greater than the penalty associated with paying late.
4. File Your Extension
If you absolutely cannot file your return, you should file an extension as soon as possible. An extension still means you'll pay a fine or penalty for late payment (unless you don't owe anything), so you may want to pay an estimate. An extension will grant you a further six months to complete your filing.
Even if you file an extension, you should strive to complete your tax return as soon as possible. Every moment that you go without paying your taxes could lead to additional fines, depending on how much you will owe. A tax accounting firm, like Herman & Cormany or a similar location, can help you get your documents together and file accurately.