The dreaded tax filing deadline is Monday, and if you haven't filed yet, you're in good company. New numbers from the IRS show 96.5 million individual returns were filed as of April. 5. That leaves an estimated 51 million returns still to be filed, or about 45% of the total individual returns expected to be filed this year.
What do do now:
Personal finance expert Carmen Wong Ulrich, president and co-founder of Alta Wealth Management, gave Jansing & Co. some advice on what to do if you're among the 45% facing Monday's deadline. Here's what she said:
- Be realistic about your ability to get taxes done by Monday
- If you can't file by Monday, file an extension (Form 4868). That will give you six months, until Oct. 15 to file
- If you owe taxes, you must pay by Monday an estimated payment (within 90% accuracy) or you can get hit by major late fees and penalties
Beware of penalties:
Ulrich says those penalties can be substantial. According to the IRS:
- The penalty for filing late is usually 5% of the unpaid taxes for each month or part of a month that a return is late
- If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax
- If you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of ½ of 1% of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25% of your unpaid taxes
On seeking help:
A new Quinnipiac University poll finds nearly two out of three voters have someone else prepare their tax return. Ulrich has some advice for procrastinators seeking help:
- Consider a tax-preparing service for simpler returns
- For more complicated returns, consider an accountant
- Shop around for an accountant, check credentials, get referrals
Don't forget about tax deductions:
And don't forget to consider some common tax deductions, including:
- Charitable donations including cash, clothes, furniture, etc. Make sure you have a receipt
- Job hunt expenses--that includes resume prep and travel
- Freelancers or independent contractors can deduct a portion of their internet and/or cable if they have a true home office. Medical expenses are also deductible