We have some good news and bad news regarding the deadline for getting your income tax returns in on time.
The bad news is that if you missed the supposed April 15th deadline (last Friday), fear not: the good news is that the actual due date for filing your 2015 income tax returns is midnight on Monday, April 18th.
Here’s what you should do if you can’t file by the 18th, or (gulp), you don’t have the money to pay what you owe.
Do you even have to file?
Maybe not. Depending on your age and income, you may not have to file a federal or a state income tax return, as long as you don’t owe any taxes. Go to tinyurl.com/fedtaxreq to check on the federal requirements, and Wisconsin residents can head to tinyurl.com/wistaxreq to see the state filing requirements.
Even if you’re not required to file, there may still be reasons to do so. For instance, you may be unaware that you are eligible for a refund or credit. Or you may have a situation in the future that requires you to submit tax returns from previous years (for instance, applying for a loan).
When you can’t file on time
Maybe you’re waiting for a needed document, or there has been a life-altering event in the previous tax year that threw a wrench in to the process. Or maybe you’re just a procrastinator.
Whatever the reason, don’t panic. Millions of other taxpayers are in the same predicament. But it’s best not to ignore the need to file—doing so can incur penalties, including up to 25% of any amount that you owe.
Instead, you can request an extension of your deadline by filing Form 4868 either electronically or via regular mail before the April 18th deadline. You can get a copy of the form at www.irs.gov, or use the “Free File” program at the IRS site to file for an extension.
Once filed and confirmed, this step will give you another six months (until October 17h of 2016) to get your information together and file your 2015 return.
However, getting an extension to file your taxes does not mean you get an extension on making 2015 contributions to time-sensitive accounts (like IRAs and Roth IRAs), so make sure you get those in by the 18th.
When you can’t pay what you owe
Whether you file your taxes by the normal deadline or if you file for an extension, you still have to pay any taxes owed by April 18th. But again, like many other taxpayers, you may not be able to do so.
To avoid as much trouble and cost as possible, you should still file your returns before April 18th, and pay whatever you possibly can toward what you owe.
Depending on your situation, you may want to put as much of the unpaid balance as you can on a credit card. But you will have to pay a fee to the payment processor, plus the interest on the unpaid balance charged by the credit card company.
After you file your returns and include less than what you owe, you will soon receive a notice from IRS inquiring about the remaining balaance. Don’t ignore it! Instead, call the number on the notice to discuss your payment options.
If you can’t pay at least 90% of the federal taxes you owe, you will likely be billed 0.5% interest per month on the unpaid balance, capped out at 25% of what you still owe. For instance, if you owe $1,000, it will cost you $50 per month in interest, up to $250.
The IRS may also allow you to set up an installment payment plan that could reduce the amount of interest and penalties that you pay.
If you’re still in the dark about these or other tax filing questions, visit the IRS “Help and Resources” site at irs.gov/Help-&-Resources, or call 800.829.1040 (and prepare to “standby” for quite a while). Information on Wisconsin state tax issues can be found at revenue.wi.gov.