4 weeks Ago By Michael Milliorn
The 15th day of the fourth month following the end of the last fiscal year—better known as Tax Day—has arrived, meaning it's the final day for taxes to be filed on-time. For those who haven't filed yet, it's imperative that the sometimes daunting task gets completed. Those who have yet to file should start the process by collecting all the documents that are necessary to fill out a return.
These documents include a W-2 for earnings and 1099-NEC AND 1099-MISC for those who are self-employed as a freelancer or contractor. Major life events that could alter tax breaks or reportable income should be considered as well. Tax filing can be completed with an IRS free file partner or online through the IRS Direct File for those who qualify.
Other online filing company options include TurboTax and H&R Block. Those looking to file in person may visit local tax preparation services. For community members who are unable to file before the end of the day, an automatic six-month extension of time to file may be requested.
An extension of time to file is not an extension to pay however. Form 4868 , Application for Automatic Extension of Time to File U.S.
Individual Income Tax Return, should be filed before the deadline has ended and any owed taxes must be paid by the original due date to avoid possible penalties, according to the IRS website . All federal income tax returns from previous fiscal years that have not yet been filed should be filed as soon as possible. Filing past due returns and paying remaining balances can help limit interest charges and late payment penalties.
Community members who fail to file a return may risk losing a refund. Those who are due a refund for withholding or estimated taxes must file a return within three years of the return due date to claim. “We hold income tax refunds in cases where our records show that one or more income tax returns are past due,” according to the IRS website .
“We hold them until we get the past due return or receive an acceptable reason for not filing a past due return.” Self-employed individuals who do not file a federal income tax return will not have self-employed income reported to the Social Security Administration and will not receive credit toward Social Security retirement or disability benefits. Loan approvals may be delayed for those who have not filed their returns as well.
Those who cannot pay what is fully owed may request an additional 60 to 120 days to pay their account in full through the IRS Online Payment Agreement. The IRS may file a substitute return for those who fail to file a federal income tax return. A substitute return may not give the filer credit for deductions and exemptions they may qualify for.
It is in the best interest of the filer to file a return regardless of if the IRS has filed a substitute return. This will allow for the collection of credit and deductions and the opportunity to take advantage of available exemptions. “The return we prepare for you (our proposed assessment) will lead to a tax bill, which, if unpaid, will trigger the collection process,” according to the IRS website.
“This can include such actions as a levy on your wages or bank account or the filing of a notice of federal tax lien. If you repeatedly do not file, you could be subject to additional enforcement measures, such as additional penalties and/or criminal prosecution.”.
