The due date for filing individual income taxes is now less than three weeks away.
Many people have of course already filed their taxes. But what if, for whatever reason, you are struggling to meet the April 15 deadline?
In this post, we will discuss some of the considerations and possible consequences involved in being unable to comply with the April 15 date.
First of all, it should be noted that it is possible to file for a six-month extension. The form to be filed for an extension on individual income taxes is Form 4868. If you need more time to get your federal return ready, this may be an option for you to consider.
Keep in mind, however, that if you don’t file by April 15 or obtain the six-month extension the prospect of tax penalties becomes very real.
How big are the penalties that can be assessed by the IRS for a late filing? Well, a taxpayer is looking at having to pay a certain percentage of their net tax liability. The rule of thumb is that this amount is 5 percent for each month – or even fraction of a month – a return is late.
It is true that the penalty for failure to file on time is limited to a specified maximum amount of the tax liability. That amount is 25 percent.
But for someone with substantial taxes to pay, the penalties can still really add up.
And so, in this post, we offer a gentle reminder. If you haven’t filed your taxes, or obtained a six-month extension, it is time to take steps to do so.
Source: Forbes, "What Are The Penalties For Failing To File Your Tax Return On Time?" Tony Nitti, March 29, 2014