Sometimes, through no fault of your own, you are forced to file your 1040 late. That often happens because other financial institutions fail to distribute their tax reports to you in time. If that is the situation you face now, don’t sweat it. You can minimize the cost of filing your tax return late but you have to get in gear.
Note: If you are putting off filing your taxes because you don’t have the scratch to pay your bill read my post on IRS tax debt relief. That might help you solve the underlying problem. In any event, you’ll only make the problem worse if you fail to file friend. Just do it Pilgrim.
The first thing to do is gather up all of the documents you need to file your taxes and get them organized. Tax preparers are still willing and able to help you file your overdue return no matter what time of year it is. Another alternative is to do your own taxes. These days the software is pretty advanced and for the right person, doing it yourself could be a good choice. No matter which option you choose, electronic filing is your best bet at this point. This way the IRS will receive it as soon as possible.
Another Note: If you are putting off filing because you don’t have the money to pay your taxes, look into setting up an installment tax payment plan. You won’t be charged penalties and it’s a pretty painless process.
For those individuals who filed for an extension before the tax deadline, know that you will now have until October 15 to file your return. Just the same, it’s
important to understand that while you have six months time to prepare and file your taxes, you still have to pay what you owe on time. That means if you know you are going to owe money, you need to estimate what the amount will be and send it in immediately. An extension does not mean that you can wait to pay; it just means that you can wait to file. Even if you have to borrow from friends, do it. Find any source you can at this point. Just don’t ignore your debt to the IRS.
Late fees and penalties on what you owe and have not paid start adding up at 12:01 am on April 16.
More on payment options.
If you do not have any way to come up with the money, then your next best option is to go to the IRS website and file an online installment payment agreement. If you owe less than $25,000, you can easily apply online for the IRS payback installment plan. Approvals usually come in about 10 days. You will then be able to pay back what you owe in a monthly payment plan. There is a small fee for setting up the account, but it is certainly worth it to avoid higher penalties.
If you are a late filer who is due a refund, consider it your lucky day. There are no penalties or fees for filing late, but there is a statute of limitations on how much time you have to collect. Your best bet is still to prepare and file your taxes immediately.
When dealing with the IRS – do not fool around. They are smart and they can be vicious. Do not underestimate them please. Get your return done as soon as possible and play it straight.