It is tax season AGAIN and unfortunately, as US Residents, we cannot avoid it. Tax Day is just around the corner, and as much as we would like to know all our clients are ready, we understand unexpected events happen and some of you will need to postpone the tax filing process. For those who won’t be ready to file a personal income tax return or foreign compliance disclosures on time, thankfully the Internal Revenue Services (IRS) concedes a six-month extension to file, just keep in mind that the 2017 tax year extension request must be filed by the tax deadline which for 2117 is April 17, 2018. Let’s take just a moment and open-hearted ask:
Am I ready to file taxes this coming April 17, 2018?
- If you are ready, congratulations! Don’t wait, prepare your tax returns quickly and pay your taxes by 4/17/18 to avoid penalties and interest.
- If you feel you are almost ready, chances are that you might have the opportunity to file on April 17. We recommend you to focus, set time aside and complete it. If you are tight with the time, then contact us, we will make sure to complete it for you or to file an extension,
- If you are not ready at all, then you should file an extension. Remember if you are filing an extension you must do it by the tax date, April 17.
- Mail with a Confirmation Return Receipt with the US Post Office or electronically file the extension and print the confirmation of receipt by the IRS for your records.
- Estimate your personal income taxes and pay with a 90% accuracy by 4/17/18 to minimize penalties and interest.
Extension Period
Filing a tax extension is certainly an advantage taxpayers should use when they are not able to file the taxes on time. The extension allows taxpayers to file the return six (6) months later, for 2016 taxes will be on October 15, 2018, as long as the taxpayer had completed Form 4868 Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.
Late Penalties
Very important to remark, there are two potential penalties, one is an extension to file the return, but it is not an extension to pay the taxes owed. You still have to pay your income tax by April 17, or the IRS will mail you late payment penalties which start from one-half (½) of one (1%) percentage per month on the amount of tax owed after the tax deadline, the maximum penalty is 25%. Filing late also incur on penalties, the late filing penalty is usually five percent (5%) per month up to a maximum of 25%.
Estimate and Pay your Taxes by 4/17/18
You must estimate the tax amount you owe to the IRS and submit the payment whether you file a tax extension or not. Your estimated tax payment must be as accurate as possible or the IRS may assess penalties discussed above. If the estimated tax payment attached is under the amount owed, the IRS will issue interests and penalties.
You can file an extension online, mail the paper form to the IRS using the US Postal Service Certified Return Receipt Confirmation, or using the electronic services of a tax professional; pay part or all of the income tax you owe, preferably, by setting up your own EFTPS.gov account (Electronic Funds Taxpayer Payment Services) for FREE or you can with your credit card or debit card, third party fees may apply. If you are doing it yourself, please take a moment to carefully read all the instructions on the form, if you need assistance contact the IRS or seek the advice of a a seasoned tax professional. Give us a call and we will help you file your extensions, tax returns and foreign disclosure compliance requirements on time.