Don’t panic if you haven’t filed your tax re­turn yet

The Tribune (SLO) - - News - BY SARAH SKID­MORE SELL

Tax day is com­ing; but what if you can’t file – or pay – your taxes on time?

The IRS said Fri­day that even with days to go un­til the dead­line, about 50 mil­lion tax­pay­ers had yet to file their tax re­turns. If you are among them, don’t de­spair – there are op­tions.

DON’T DE­LAY

If you don’t think you will be able to com­plete and file your taxes on time, re­quest an ex­ten­sion.

Fil­ing an ex­ten­sion helps tax­pay­ers avoid penal­ties for a late re­turn, ac­cord­ing to the IRS. You can seek an ex­ten­sion through the IRS web­site, your tax prepa­ra­tion pro­fes­sional or most tax prepa­ra­tion soft­ware com­pa­nies.

While an ex­ten­sion pro­vides more time to file, it does not pro­vide more time to pay any taxes owed.

The dead­line to file in­di­vid­ual tax re­turns and pay taxes owed is April 15 for most tax­pay­ers. Be­cause of area hol­i­days, tax­pay­ers who live in Maine or Mas­sachusetts have un­til April 17.

SPE­CIAL CASES

Any­one can re­quest an au­to­matic tax-fil­ing ex­ten­sion, but some peo­ple get ex­tra time with­out ask­ing, ac­cord­ing to the IRS. Dis­as­ter vic­tims, those serv­ing in a com­bat zone and Amer­i­cans liv­ing abroad au­to­mat­i­cally get more time to file.

Check the IRS web­site for spe­cific dates but vic­tims of cer­tain fed­er­ally de­clared dis­as­ters – such as last year’s Cal­i­for­nia wild­fires, the Alaska earth­quake or se­vere storms in sev­eral parts of the U.S. – are al­lowed to file later and avoid cer­tain penal­ties. Mil­i­tary ser­vice mem­bers and eli­gi­ble sup­port per­son­nel serv­ing in a com­bat zone have at least 180 days af­ter they leave the com­bat zone to file and pay. And U.S. cit­i­zens who live and work out­side the U.S. and Puerto Rico have un­til June 17 to meet their tax obli­ga­tion.

DON’T RUSH

While it’s im­por­tant to heed dead­lines, it’s also crit­i­cal not to rush when you file your taxes.

The IRS re­minds tax­pay­ers that mis­takes can hap­pen when hur­ry­ing to file a tax re­turn. Er­rors can mean longer pro­cess­ing times and pos­si­ble tax re­fund de­lays.

The best way to avoid com­mon mis­takes is to file elec­tron­i­cally. The IRS es­ti­mates that about 70% of tax­pay­ers can file their tax re­turn at no charge by us­ing the IRS Free File soft­ware. It also has elec­tronic ver­sions of its forms on­line for those that do not qual­ify for Free File.

PAY UP, EVEN­TU­ALLY

If you owe money to the IRS but can’t af­ford to pay it at the mo­ment, there’s no need to panic, says Lisa Greene-Lewis, CPA and tax ex­pert at Tur­boTax.

Con­tact the IRS to ask for an in­stall­ment agree­ment when you file your taxes. If you qual­ify, an in­stall­ment agree­ment will al­low you to set up a monthly pay­ment plan to pay your fed­eral tax debt off over 6 years. If you’re able to pay off your bal­ance within 120 days, the in­stall­ment plan won’t cost you any ad­di­tional fees.

If you file an ex­ten­sion but you choose not to pay what you owe by the tax dead­line, the IRS will charge you a fail­ure-topay penalty and in­ter­est on the taxes you owe them.

Con­tact the IRS to dis­cuss your pay­ment op­tions at 1-800-829-1040. The agency may be able to pro­vide other forms of re­lief to help you set­tle your debts. In some cases, the agency may be able to waive penal­ties. How­ever, the agency is un­able to waive in­ter­est charges which ac­crue on un­paid tax bills.

Do not ig­nore the prob­lem as fail­ure to file or pay fed­eral taxes can lead to se­ri­ous and ex­pen­sive con­se­quences.

KEITH SRAKO­CIC AP

If you don’t think you will be able to com­plete and file your taxes on time, re­quest an ex­ten­sion. Fil­ing an ex­ten­sion helps tax­pay­ers avoid penal­ties for a late re­turn, ac­cord­ing to the IRS.

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