Tax Filing

As tax season draws to a close, millions of Americans scramble to get their documents together and file their taxes. Tax procrastination is a national pastime, so don’t feel as though you’re the only one going through this rushed, stressful, process. Here are a few last minute tax tips to help late filers get through the process unscathed.

E-file

Electronic filing (e-filing) increases every year, primarily because it offers ease of use and quicker returns for tax refunds (tax refunds are typically issued two weeks after a taxpayer files an electronic return). In 2009, an estimated 80 million Americans filed their taxes online, using commercial software or the IRS website’s filing page. E-filing reduces the worry of math errors (the software does all the math for you), the cost of paying for return receipts at the post office (not to mention the time spent waiting in line), and the hassle of making photocopies of your return.

Extension

For those who are procrastinators, one of the best tax tips is to file for an automatic six month extension. As long as you submit your request for extension before April 15, you’re entitled to a six month reprieve to file a return. The catch is that while you get an extension to file taxes at the last minute, it’s not an extension to pay your taxes. If you owe taxes that money is still due on April 15, and non-payment of taxes subjects you to penalties and interest until you pay. Hence, once of the most important tax tips: if you owe money to the IRS, always pay it on time!

If You Can’t Afford Your Taxes

Get the paperwork done in advance and file on time anyway. If you’re waiting till the last minute because you’re afraid you won’t be able to afford to pay what you owe, at least submit a partial payment. Paying at least a portion of the taxes you owe does two things. First, it reduces the amount of penalties you will be assessed for late payment of taxes. Second it is a good-faith showing to the IRS that you are serious about paying your taxes and reduces the chances that the IRS will decide to audit you. Making a credit card payment may be tempting, but with the recent increase in credit card interest rates, it’s probably not a fiscally smart move. For those with interest rates under 10% (which is a tiny portion of the U.S. these days), it may make sense, but for everyone else, you’ll likely be paying more in interest over the long term with credit cards than with the IRS. On the other hand, if you just need to use the credit for a few months and can pay off your credit card in full before too long, credit cards can make sense.

For a point of reference, the IRS failure to pay penalty is 0.5% for each month the tax is not paid and the interest is 4% per year. The failure to file penalty is 5% each month your taxes are filed late, up to a maximum of 25%. The penalties for not filing your taxes can be crushing in addition to the taxes you already cannot afford. So be sure to at least file your taxes (or file for an extension) and make a partial payment by April 15. If you need a long period within which to pay the total amount, you can arrange a payment schedule with the IRS, though interest will continue to accrue until the tax is paid in full.

Tax Lawyer Free Consultation

When you need tax help, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Michael Anderson

People who want a lot of Bull go to a Butcher. People who want results navigating a complex legal field go to a Lawyer that they can trust. That’s where I come in. I am Michael Anderson, an Attorney in the Salt Lake area focusing on the needs of the Average Joe wanting a better life for him and his family. I’m the Lawyer you can trust. I grew up in Utah and love it here. I am a Father to three, a Husband to one, and an Entrepreneur. I understand the feelings of joy each of those roles bring, and I understand the feeling of disappointment, fear, and regret when things go wrong. I attended the University of Utah where I received a B.A. degree in 2010 and a J.D. in 2014. I have focused my practice in Wills, Trusts, Real Estate, and Business Law. I love the thrill of helping clients secure their future, leaving a real legacy to their children. Unfortunately when problems arise with families. I also practice Family Law, with a focus on keeping relationships between the soon to be Ex’s civil for the benefit of their children and allowing both to walk away quickly with their heads held high. Before you worry too much about losing everything that you have worked for, before you permit yourself to be bullied by your soon to be ex, before you shed one more tear in silence, call me. I’m the Lawyer you can trust.

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