The deadline to pay your taxes is steadily approaching…. 2 more days! Are you a procrastinator? Then you might want to listen to this advice!
Are you considering filing an extension on your taxes? If so, here are some things you want to keep in mind:
1. Even if you plan on filing an extension, you still have to file the extension paperwork by April 15th. Tax form 4868 gives you an extra six months. If you’re expecting a refund, there is no penalty for filing late… essentially because you are giving the government an interest-free loan and why wouldn’t they like to keep your money as long as possible?
2. If you aren’t paying your taxes on the 15th because you need to get some more money together (isn’t that always the case?), you should file an extension requesting a few extra months to pay. Yes, you will incur a fee, however it’s a small price to pay versus just not filing on time!
3. Regardless whether or not you actually get an extension, you still need to make a payment if you think you owe money for the 2014 tax year to avoid a monthly charge for a late payment. The failure-to-pay penalty is 0.5% of the taxes due for every month you are late, as well as the regular 3% annual interest rate for tax underpayments.
I’m a poster child for the thought process, If I ignore it, maybe it will just… go away. Don’t be like me! Taxes do NOT go away and it can cost you a lot of money! Failure to file can cost you between 5% and 25% of what you owe.
It is imperative that you remember that filing a tax extension does not allow you to pay later, but simply extends the amount of time you have to file your return. You’ll still have to pay any outstanding tax balance by April 15, or face interest and penalties.
If you have any questions, please don’t hesitate to call Tax Alternatives! We have the experience to get you on the right track! Give us a call today at 615-742-1099.
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