Ahead of Tax Day 2017, many have a burning question: How do I file my taxes? EOntario offers several tips about filing federal income taxes, especially for those braving the task without assistance or filing for the first time.
The good news is that the deadline to file income taxes on money earned the previous year — which usually falls on April 15 — is on April 18. The 2017 Tax Day and Emancipation Day in the District of Columbia both fall on the weekend this year. As a consequence, taxpayers have three additional days to file taxes in 2017 because the two milestones are pushed out to the workweek, according to the Balance.
Note: The information provided is not to be construed as professional tax advice and is meant for individuals (Family & Dependents), not businesses. For legal advice, consult with an income tax consultant and refer to the IRS website.
Learning how to file your taxes is only one aspect of your responsibility as a U.S. citizen. Perhaps, one of the most important things you can do is file on time. Otherwise, you could potentially incur lofty penalties — or be criminally prosecuted, in some cases.
“If you file a return but don’t pay all tax owed on time, you’ll generally have to pay a late payment penalty. The failure to pay penalty is one-half of one percent for each month, or part of a month, up to a maximum of 25 percent of the amount of tax that remains unpaid from the due date of the return until the tax is paid in full.”
1. If for some reason you can’t make the deadline, you also run the risk of facing an additional penalty that is “five percent of the tax owed for each month, or part of a month that your return is late, up to a maximum of 25 percent.” Many tax pros suggest borrowing the money from a family member or lending institution (at a larger rate) — if possible — to offset the large fines levied by the IRS.
Additional tax tip: To lessen the amount of money paid for delinquent taxes, consider using a credit card if the numbers work in your favor.
2. Another option is to file a tax extension, as e-file explains. Let’s face it: at times, life happens and you may not have gotten around to filing your taxes on time. Your W-2 form may have gotten lost in the mail (or the dog ate it); you are laid up on medical leave or you could be facing some other exigent circumstance.
The federal government allows you more time — up to six months, according to e-file. It’s relatively painless and gives you somewhat of a cushion to get your business in order — that’s assuming you’re approved.
3. If you think you need added time to file your taxes this year, do a Google search of “IRS Tax Form 4868.” It’s fairly easy to find and asks for key identifying information and estimates. If you owe taxes at the end, you’ll need to ante up; if you don’t, Uncle Sam will cut you a tax refund check.
4. How do I file my taxes when I can’t afford to pay? Again, don’t fret; there are options that may soothe the blow. One piece of advice is not to dodge your obligation (don’t even think about it). Instead, contact the Internal Revenue Service and notify them of your plight.
In most cases, you can work out the situation using an installment agreement. It gives you time to pay your bill using monthly payments. There are still interest and fees attached to your installment, but they are assessed at the end of the term. You always have the option to pay off the balance early.
5. Keep your head about you once you learn how to file your 2017 taxes.
Now that you’ve gotten past the thought of not filing federal taxes at all, it’s important to relax and take deliberate steps in meeting your tax obligation by the deadline. Remember, the government could send out the “men in black” if you fail to file — particularly if you owe more than $10,000 in back taxes.
Moreover, agents can attach a lien to personal property like your paycheck, Social Security payments, your car and even your home in some cases. And if that’s not enough, the IRS can report the delinquency on your credit report. Just don’t ignore your responsibility to file.
6. You can file on paper or by using several “approved” online sources. If you have money coming to you, the government will mail you a check or deposit the funds electronically in a banking account.
Now that you know how to file your taxes for 2017, there are some free options available for millions of Americans. Remember, if you don’t won’t to go at it alone, hire a tax preparer, CPA, friend or simply research other free or low-cost methods.
[Featured Image by Atlantic_Adv/Thinkstock by Getty Images]