So you missed Tax Day. A million things could have happened. Maybe your hard drive died, you had some bad tuna or your dog ate your return. I don’t care. I’m not judging. The question isn’t so much “what happened?” but “what happens next?”
Here are some quick tips if you didn’t get your return filed on the big day:
1. Don’t panic. It won’t get you anywhere. Too many times, taxpayers freak out over a missed deadline and decide that there’s no point in filing this year after all. Then, they kind of make informal plans to fix it “later” – whenever that is. Don’t. Later never comes. Fix it now.
2. File today. Or tomorrow. But file. If you didn’t file on time, get your return together as soon as you can. Penalties and interest are dependent on the passage of time. The more time that goes by, the more you will owe. And the longer that you wait, the more time you are giving the IRS since the statute of limitations for assessment won’t start until you file. So file. And don’t wait until later. See #1.
3. Pay attention to automatic extensions. The IRS has offered automatic extensions for those affected by the Boston Marathon tragedy, as well as those affected by the winter storms; many states have also offered automatic extensions. If you qualify for filing relief, you have extra time to file – in most cases, you don’t even have to fill out a form. Some taxpayers are normally entitled to a couple of extra months, including those who are out of the country or on active duty.
4. File even if you can’t pay. A lot of taxpayers figure that if they can’t pay, they shouldn’t bother to file. No, no, no. Penalties are assessed both for failure to file and failure to pay. Don’t make a bad situation worse.
5. If the dog really ate your return, tell the IRS. The IRS does have the ability to abate penalties (the law, however, generally bars the ability to abate interest) for good cause. If you file late – and you think you have good cause – you can request an abatement using form 843, Claim for Refund and Request for Abatement (downloads as pdf).
6. E-file. While I am generally in favor of using a tax professional, e-filing using tax prep software is quick and easy for many taxpayers. Best of all? IRS e-file programs are available through October 15, 2013, which is the last day that you can file on an automatic extension.
7. Find a good tax preparer. If your situation is a little out of the ordinary (foreign income? trust income? small business?), you can ease a lot of your stress – and push things along – by using a good tax preparer. Notice that I said “good.” At this time of year, if you’re already filing late or on extension, you’re going to want someone who isn’t closing up shop tomorrow with no plans to reappear until next year. Call around. Ask for referrals. Find someone that you can trust. And then follow through.
8. Pay as much as you can. If you can pay something – anything – make a payment. If you can’t pay it all at once, there are alternatives. If you absolutely can’t pay using another method, don’t scramble: you can make arrangements to pay off the balance with the IRS using an installment agreement
9. Plan for next year. I am fond of reminding my clients that Tax Day comes at the same time every year. Like Christmas. And my birthday. All of which are cause for celebration once they’re over. But a lot of the stress associated with Tax Day – like shopping for Christmas – can be avoided with a little bit of planning ahead of time. Maybe this is the year that you invest in a scanner for those receipts. Or you hire that tax pro. Or you set up personal finance software to track your income and expenses for the year. Whatever you need to do to ensure that you file on time next year (or file with an extension), plan to do those things now.