If you’re late to the tax game, don’t panic. With the right information and tools, you can still meet the deadline and ensure that your taxes are filed correctly. This guide will provide you with everything you need to know about filing your taxes late, including the benefits of filing on time, common mistakes to avoid, and helpful tips for late filers.
Importance of Filing Your Taxes on Time
Filing your taxes before the deadline has several benefits:
- Avoiding penalties: If you file your tax return after the due date, you may face financial penalties.
- Claiming refunds: If you are owed a refund by the government, filing early will allow you to receive it sooner.
- Peace of mind: Knowing that your taxes are filed on time can bring peace of mind and eliminate unnecessary stress.
Common Mistakes to Avoid when Filing Late
When filing taxes late, there are some common mistakes that people often make. To avoid these mistakes:
- Gather all necessary documents: Collect receipts, invoices, W2s or 1099s from employers or clients.
- Review forms carefully: It’s always good practice review each form multiple times during preparation process in order identify any missed details.
- Double check calculations: One tiny miscalculation could cause problems with an entire return so double checking calculations is highly recommended.
Helpful Tips for Filing Taxes Late
To ease the process of filing late taxes here are some helpful tips:
Consider Hiring Professional Help
If you’re feeling overwhelmed by tax preparation tasks or unsure about how best proceed with special circumstances such as digital currency or recent life events (marriage, birth etc.), consider hiring professional help. A certified public accountant (CPA) can provide guidance as well as prepare documents professionally which ensures high-quality work without errors.
Use E-filing Tools
Digital tax preparation tools make it easier to file taxes on time. Depending on the complexity of your return, there are a variety of intuitive and cost-effective software programs that you can use.
If for some reason you’re still not able to prepare your taxes before the deadline, it is possible to request an extension by filling out Form 4868 (Application for Automatic Extension of Time To File U.S. Individual Income Tax Return). This form will give taxpayers an additional six months to extend their filing deadlines.
Understanding the Tax Filing Deadline
The official deadline to file your federal and state income tax returns is usually April 15th. However, there are exceptions. If you live in a federally declared disaster area, have a business there, or have relevant tax documents stored by businesses in that area, the IRS may have already extended the filing and payment deadlines for you.
Also, if you’re in the armed forces and are currently or were recently stationed in a combat zone, the filing and payment deadlines for your taxes are most likely extended by 180 days. But your specific extended filing and payment deadlines will depend on the day you leave (or left) the combat zone.
Understanding Your Income Sources
Your paycheck may not be your only source of income. Other potentially taxable and reportable income sources include:
- Interest on your savings
- Investment income (e.g., dividends and capital gains)
- Pay for part-time or seasonal work, or a side hustle
- Unemployment income
- Social Security benefits or distribution from a retirement account
- Gambling winnings
- Income from a rental property you own
Organizing Your Tax Documents
By the time you’re ready to file your taxes, you should have received every tax document that third parties are required to send you (your employer, bank, brokerage, etc.). If you don’t recall receiving a hard copy of a tax form in the mail, check your email and your online accounts — a document may have been sent to you electronically.
Last-Minute Ways to Reduce Your Tax Bill
If you’re eligible to make a tax-deductible contribution to an IRA and haven’t done so for last year, you have until the tax filing deadline to contribute up to $6,000 ($7,000 if you’re 50 or older). That will reduce your tax bill and augment your retirement savings.
Proofreading Your Return
Before submitting your tax return, whether you’re using tax software or working with a professional tax preparer, proofread it. Little mistakes and oversights delay the processing of your return (and the issuance of your refund if you’re owed one). You want to avoid things like having a typo in your name, birth date, Social Security number or direct deposit number; choosing the wrong filing status (e.g., married vs single); making a simple math error; or leaving a required field blank.
What to Do If You Can’t File by the Deadline
If you’re not able to file by the deadline, fill out Form 4868 electronically or on paper and send it in by the deadline. You will be granted an automatic six-month extension to file. Note, however, that an extension to file is not an extension to pay. You will be charged interest and a penalty on any amount you still owe for the previous tax year but haven’t paid by the deadline.
Filing taxes late can be stressful but don’t worry there are steps you can take to meet the deadline while avoiding mistakes along the way. Remember: Gather necessary documents, double check calculations or consider hiring a professional, utilize digital resources if available and if need be request an extension. Keep in mind: It’s better to file on time than face penalties later down the line!