Today’s fun tax topic is penalties! *boos* Specifically, late filing and late payment penalties. *hiss*
FYI, if you don’t file your taxes on time, the IRS won’t just go away. In fact, they get kinda #^@$! and send nasty letters, but even worse, they calculate your taxes FOR you (based on only income; no deductions) and add on a failure to file penalty of 5% of the amount owed per month up to 25%. No bueno! Make sure you either file on-time or file an extension!
If you do file your taxes on time but don’t pay (or not enough), the IRS adds a late payment penalty of 0.5% of the amount owed per month plus some interest. Not good but not horrible. Like spinach instead of brussels sprouts.
And a caveat: the IRS won’t charge any penalties if you get a refund, even if you file way late! Go figure. But don’t expect them to contact you unless they think you owe!
Moving on to the annual reminders:
April approaches, so it’s crunch time for income tax filing, and inevitably some of you will not be able to get an appointment with your preparer that works for your schedule. So what can you do?
1. “Drop-Off” – All of our preparers have clients who email/fax/mail/SecureFile their information in to them (about 1/3 of our clients!). We work on your taxes and usually get back to you in about a week with questions or results. Then it’s just a matter of signatures, typically sent the same way, and you’re done.
2. See Another Preparer – We know you’re all very loyal to your preparers, but sometimes scheduling just can’t be worked out. Be assured, all of our preparers are extremely experienced and knowledgeable.
3. File an Extension – If you just can’t get all your tax information together in time, you can ask us to file an extension for you.
The last day to file your income taxes this year is April 17th, but please don’t wait until the last minute!