There's a Big Tax Deadline Coming Up. Here's What You Need to Know
If you filed for a tax extension back in April, the day of reckoning is almost here. Monday, Oct. 16, is the deadline this year to hand your tax forms over to the IRS.
Here's everything you need to know to make sure the IRS receives your return on time for this year's tax extension deadline.
What forms you'll need:
To prepare your tax return accurately, you'll need to tally all your income for 2016. Make sure you have all your paperwork at hand before you get started. Common documents that taxpayers need include: W-2s from all employers you worked for during the past year; 1099 forms if you completed contract work, earned investment income, sold a home for taxable gains, or took IRA or pension distributions, among other situations; and SSA-1099 for Social Security benefits.
Once you have all necessary documents, its time to chose the best tax filing form for your needs.
Generally, if your tax situation isn't complex, you can use the 1040EZ—this works best for those with taxable income under $100,000 who are filing as either single or married filing jointly, have no dependents, and have investment income totaling less than $1,500.
A 1040A form can be used instead if you plan to claim certain tax credits (such as those for child and dependent care expenses, education spending, or retirement savings contributions) have capital gains distributions, or plan to claim adjustments to income for IRA contributions or student loan interest.
If you have a more complicated situation, you'll probably need to file using the 1040 form. This is best for taxpayers with taxable income above $100,000, or those who claim itemized deductions, or have self-employment income or income from a property sale.
How to submit your tax return:
If your income is below $64,000, you can use free online software to complete and file your return. Use the the IRS's free file software lookup tool to take advantage.
Earn more than $64,000? The IRS offers free fillable forms you can use to prepare and file. Be aware that the this program shuts down on Oct. 21, five days after the deadline.
You can also use a tax prep software or a tax professional to file for you as well.
What happens if you miss the extension deadline:
You can't file for a second extension, so file your tax return as quickly as possible—especially if you owe the IRS money.
Those who owe the government and fail to file (or pay) on time typically owe interest and penalties on top of their original tax bill.
Late filers face a penalty of 5% of the unpaid tax, plus interest, due each month, with your total penalty capped at 25% of the total amount you owe. Wait more than 60 days past the deadline and penalty becomes a minimum $205—or, if you owe the IRS less than $205, 100% of the unpaid tax.
What if you file by the deadline but are late to pay? You owe 0.5% of the amount due, plus interest, each month until your tax bill is paid off. The late-payment penalty is also capped at 25% of the total amount due.
The kicker here, however, is that while the extension gave you a six-month grace period to collect your documents and prepare your return, it did not push back the clock on when your check to the IRS needed to be in. What that means: Even if you filed for an extension, if you owed money and didn't pay your tax bill back in April, you face the late-payment penalty.
Taxpayers expecting a refund face no penalty for filing a tardy return—although, of course, you won't see any of that refund money until they file.
If you've been affected by a hurricane or other natural disaster:
The IRS announced it will allow further postponement of its tax extension deadline to individuals who were hit by one of this season's many hurricanes. Anyone residing in Florida, Georgia, Puerto Rico, the Virgin Islands, and some parts of Texas will have until Jan. 31, 2018 to file any returns.
Again, because any taxes owed were due for those returns on April 18 of this year, there is no extended window for payment.