If you have a balance due and don’t file a tax return by April 15, you face interest on the unpaid taxes as well as a failure-to-file penalty. Interest and penalties are added to your balance due. If you can’t file by the deadline, request an extension of time to file (see below).
If you file on time or request an extension but don’t pay all or some of the balance due by the deadline, you will incur interest on the unpaid amount and a failure-to-pay penalty. If you can’t pay the full amount, you should pay as much as possible by the deadline to minimize interest and penalties.
Get Recovery tax breaks – Last year’s American Recovery and Reinvestment Act created a full slate of tax breaks, which can be claimed on tax returns right now. These include:
—The Homebuyer Credit
—Making Work Pay Credit
—American Opportunity Credit
—Home Energy Credit
—New Car Tax and Fee Deduction
(You can get information on these and other Recovery credits at IRS.gov/recovery.)
File electronically – Most tax returns are now filed electronically – either from home using purchased tax software, by a tax professional or through Free File. Small and large businesses that have a bookkeeper who is also skilled at tax preparation can easily use these systems. My strongest recommendation is to obtain a bookkeeper who will manage your books through the year and help you stay in compliance, but, if you find yourself still needing to file 2 days before the deadline these tips are helpful.
—E-file is accurate: Most available tax preparation programs check for errors and missing information, reducing the chances of delayed refunds or follow-up correspondence from the IRS.
—E-file is fast: With most tax software, you can file a state tax return at the same time you file your federal return. Once a return is accepted for processing, the IRS electronically acknowledges receipt of the return. And refunds take only about half the time of a paper return. If you choose direct deposit, you will get your refund in even less time.
Whether you file electronically or on paper, your refund can be automatically deposited into the bank or financial account of your choosing. Direct deposit is faster than a paper check. If you e-file and use direct deposit, you will receive your refund even faster. Direct deposit also is more secure than a paper check since a direct deposit goes directly into your account and cannot be lost in the mail or stolen.
Request an Extension of Time to File – If you can’t meet the April 15 filing deadline, get an automatic six-month extension of time to file by filing Form 4868, Automatic Extension of Time to File. The form needs to be submitted by April 15.
There are several ways you can request an extension, including Free File or Free File Fillable Forms, through your tax professional, with tax software you installed on your computer or on paper.
An extension pushes your filing deadline back to Oct. 15. However, an extension of time to file is not an extension of time to pay. If you owe taxes, you need to pay at the time you file the extension or face a non-payment penalty.
Help is available – As a certified tax preparer and bookkeeper I am available to speak with you about your taxes and create a plan and system for the 2010 year to ensure that you do not face penalties next year.
Please feel free to contact me at nalanijefferson@gmail.com
