By Leslie Munas
Manager, Tax Services
Email Leslie
Did you miss the April 15 tax filing deadline? You’re not alone, as roughly one in three Americans procrastinate on filing their taxes. (One in four don’t feel prepared to file.)
If you requested an extension, here are a few things you might want to keep in mind …
You now have until October 15 to file your return.
This is an extension to file, not to pay. Any taxes you owed were due on April 15. If you keep putting off paying them, you stand to face a 0.5% penalty charge each month they remain unpaid. But paying late is cheaper than simply not filing, which will cost you 5% of your unpaid taxes each month. So, use the extra time wisely to set up a payment plan and ensure your return is thoroughly accurate, as any mistakes can cost you a 20% accuracy penalty — or 75% in cases the IRS deems more serious.
If you’re expecting a refund, you won’t incur a penalty charge for filing late. But the IRS will hold on to your refund until you file. It can hold your money for up to three years.
An extension doesn’t give you more time to contribute funds toward a Traditional or Roth Individual Retirement Account (IRA). An exception is the Simple Employee Pension IRA for self-employed individuals or small business owners with no employees. If you use this plan, you may make contributions up until October 15.
Consider hiring a tax professional. This is especially important if you felt unprepared for filing on Tax Day. A tax professional can ensure you have all the proper documentation for an accurate return come October. More than half of all taxpayers turn to professionals for filing — there’s no shame in seeking help.
The bottom line: If you rushed to request an extension on April 15, don’t end up turning in a rushed return on October 15 — or letting the deadline slip past you again. Plus, there aren’t any extensions available beyond October.
If we can assist you further with any tax-related issues, please call us (317) 608-6699 or email Leslie.