Filing tax returns can be quite a daunting task for most people. It is even more difficult for those who are not financially savvy or do not have the right knowledge about the filing process. Some people file their taxes so late that they might even end up paying extra penalties and fees to the Internal Revenue Service (IRS). The most common reasons for late filing are poor money management, financial problems such as low income or unexpected expenses, changes in tax laws, and the lack of proper education. Here are useful tips for filing after the deadline.
Back Up Your Tax Form
If you are filing a 1040-X, which is an amended tax return then you need to have the original copy of the return filed. If you sent the original returns by mail then take them out from the post office on time so that they do not send them back to you. Even if the IRS asks for a copy of the original return you should be able to provide it easily.
Know What IRS Needs
The IRS needs certain information in your amended tax returns. So it is always better to read and understand thoroughly the information that you are providing on your form as well as other forms such as W2, 1099 etc. If there is any question or doubt then contact the IRS immediately. It is better not to leave things pending until they become more complicated or bigger problems arise that threaten your financial health and credit rating. The late filing penalties alone can equal about 15% of total taxes due so do not let additional fines make this an expensive mistake.
Pick The Right Time To File
Summer is a good time for filing late returns as the IRS advises many taxpayers who are an extension that they can wait until November or December to file their taxes.
In fact, according to them if you need additional three months to get everything together then there will be no problem in getting your tax return filed even in January of next year. However, these considerations for filing past due tax returns all depend upon the kind of financial and family situation as well as compliance history. So find out what works best for your situation and take necessary action accordingly. If at all possible try to avoid filing late returns unless there is absolutely no other option available!
File Regardless of Debt
If you have enough cash to pay your debt right away then it is always advisable to do so. It is also a wise idea to avoid accruing more penalties and interest on any taxes due. However, if you cannot afford to pay off your debt completely, in full or on time then filing for an extension of time might be the best solution.
In case of any financial problem remember that the IRS is not out there to target or punish or ruin financially struggling people but simply collecting taxes as directed by law. So think before you file late returns and make sure that you are doing it for the right reasons and at the right time. If someone has advised you otherwise, ask them some questions about when would be good timing for filing and what are the penalties involved. The IRS is ready to help you but it is a good idea that you understand your rights and obligations and what has been assigned to you.
Ask For Help
There are several resources available online that you can use to find the answers to your questions regarding filing returns after the deadline. The IRS website has a lot of credible information about these matters and you should not hesitate to search out additional details.
You can also talk to a professional tax preparer or CPA who will be able to provide accurate information on this matter. Avoid asking other people such as family members or friends since they may not have any idea of what is involved in this process. Their suggestions might get you into more trouble than before so it is better to ask for help from professionals instead!
Get Enrolled With An E-File Option
Filing taxes electronically helps you avoid human errors as well as is the easiest way to file your taxes after the deadline. It also allows you to save money and get refunds quickly. If you do not have any plans for filing late returns then getting enrolled with the e-file option would be a good idea. However, if there are reasons why someone does not want to file electronically before the deadline then it is better that they approach an IRS centre or tax office where they can complete returns manually under the supervision of a professional who will help them in case of any problems.
Filing Late Returns Will Not Affect Future Returns
If you have filed early returns in a previous year then even if you file late for the same year, this will not affect your future returns in any way. So do not worry about how filing after the deadline could affect your finances or credit rating as none of this can happen unless there are other issues associated with this act like tax fraud, hiding money from taxes etc. An extension actually makes sure that no interest charges or penalties get added to your return so filing later still gets you out of trouble both legally and financially.
Do Not Ignore Correspondence From IRS
It is useful for taxpayers to answer all IRS correspondence even when they have not filed late returns. This will help the IRS understand your side of the story and also improve any open dialogues between both parties. If there is anything that does not make sense then it can be clarified easily through writing or phone call as long as you are doing this before any other action takes place by IRS like levying of bank accounts, sending out bill collectors etc.
If you have not filed your taxes yet, it is important to know what the IRS needs from you. Knowing this information will help you decide when and if filing late returns makes sense for your situation. The best time to file an extension request or a return that’s past due depends on how much money has been made during the tax year and whether or not there are any penalties involved with paying back taxes owed in instalments over time rather than all at once.