If you requested an extension, start preparing your return now.
For all of you who requested a file extension for income taxes, the deadline to file your taxes electronically is just around the bend. Make sure to file by October 17 in order to avoid penalties and reap all the benefits of filing an online return.
This has been kind of a wacky year when it comes to tax deadlines. First the special Emancipation Day holiday in D.C. pushed the normal deadline to file taxes for 2010 back three days to April 18. In addition to this change of date, the deadline for filing late is pushed back as well. Because the normal deadline, October 15, falls on a Saturday, you’ve got until Monday the 17th to get those tax returns in electronically.
All of this adds up to a bonanza for procrastinators, but don’t get fooled into thinking that a couple extra days means you can wait to start preparing. The October 17 income tax deadline is fast approaching, with only a month left to go. Fall is often one of the busiest times for individuals and families, what with work and school and the last bits of warm weather to enjoy. So get started now and don’t let this deadline catch you unawares.
October 17 is the deadline to file late tax returns electronically. After this date the IRS shuts down its online system and you’ll have to mail in a paper copy of your return for processing. It’s far better to get your return in online by the deadline, as the old-fashioned way comes with several drawbacks these days. For one thing, all that paperwork is a lot less convenient than filing online. For another, it takes a lot longer to get your refund.
Submitting a physical paper copy of your refund means that your paper refund can take as long as 8 weeks to get to you. A direct deposit refund is a little faster, but it can still take 3 to 4 weeks. Filing electronically, on the other hand, means that you can have your refund direct deposited into your account in only 10 to 14 days. So the fastest possible way to get your refund is to have your return in online by the late filer income tax deadline. All of this adds up to a huge incentive to make that October 17 deadline.
On the other hand, missing the deadline could mean that you’ll have to pay a failure-to-file penalty. Such a penalty could involve owing the IRS 5% of the unpaid taxes for each month or part of a month that the return is late, though the penalty is capped at 25% of your unpaid taxes. A failure to file within 60 days of the deadline means that you’ll have to pay the smaller of $135 or 100% of your unpaid taxes. Not a pretty picture. It’s a lot better to file even if you can’t pay all of the taxes you owe because a failure-to-file penalty is generally way more than a failure-to-pay penalty. If you can’t pay, the IRS would much rather work out a solution with you than have you avoid filing altogether. The best option, however, is to get your return in on time.
Thankfully you’ve still got enough time to prepare your tax return and have it in online by the October 17 deadline. Get started now to avoid those penalties and get your refund as quickly as possible.
Photo via Alan Cleaver on Flickr.
