If you haven’t filed your income tax returns, frankly, you need to do so now.
Taxpayers have until Wednesday, April 15, to file their returns and pay whatever is owed, but there are many advantages to beating the deadline.
First, the quicker you file, the quicker you get that coveted tax refund — simple, right? If filing electronically, you could receive your refund in less than two weeks. The IRS began accepting e-filed returns Jan. 28.
Second, the quicker you file your return, the more time you have to pay off whatever is owed. Unfortunately, everyone doesn’t get a refund. So for the folks who have a feeling they’ll being owing the IRS, it’s vital to file early and give yourself plenty of time to save money and come up with a plan for payment.
Filing your tax return early may help eliminate the need to file an extension. Time extensions are often required as a result of disorganization more than financial need, according to TurboTax.Intuit.com. Some people who wait until the last minute to file their returns simply need time to look for additional deductions or gather receipts.
When you push the process too close to the filing deadline, you increase the likelihood that you’ll need to file an extension and get help from a tax professional.
What’s worse — if you file an extension but don’t pay what taxes you owe, the IRS will charge interest and penalties on the outstanding tax debt until it is paid in full.
Also, filing an extension doesn’t give you extra time to pay your taxes, according to TurboTax.Intuit.com. If you owe, you’ll still need to pay the estimated total by April 15.
If approved for an extension, you’ll have until Oct. 16 to file your tax return, but remember:
• If you underestimate the amount of tax you owe, you’ll have to pay interest on whatever amount you fail to pay by April 15.
• If you don’t file your return or extension by April 15, you could be subject to late payment penalties — 5% of the amount you owe for each month of late payment, up to a maximum of 25%, according to TurboTax.Intuit.com.
• If you pay less than 90% of the tax you owe, you’ll end up owing a penalty of 0.5% of the underpayment every month until you pay the balance.
So, file your tax returns today. If you don’t, it could cost a lot more than you think.
Our View On the Issue is an opinion of The Reporter’s editorial board that includes Publisher Kim Patterson and Managing Editor Taylor Beck.