Every year it’s the same drill — track down W-2s, locate deduction forms, and pencil in time to actually file your taxes. Despite your best efforts, deadlines always come faster than expected. If you err on the side of procrastination, last-minute scrambling may be all too familiar. To avoid the cycle of past mistakes, here’s a look at this year’s deadlines — and what happens if you miss them.
Know these key tax deadlines
It’s easy to get overwhelmed by the long list of tax-related to-dos. To keep your stress at manageable levels, break the list into small steps. The first — and easiest one — is jotting down the important dates. If one of the irregular deadlines applies to you, set a mobile reminder.
- Monday, January 28 – IRS starts processing returns
- Monday, April 15 – deadline for most filers
- Wednesday, April 17 – deadline for Maine and Massachusetts
- Monday, June 17 – deadline if you are out of the country
- Tuesday, October 15 – deadline for filers with an approved extension
What happens if you miss the deadline
If you are like most people, you prefer to avoid paying extra fees. If you miss the deadlines above, there are two penalties to worry about:
- Failure-to-file – This is the larger of the two penalties. If you don’t file by the deadline, this penalty accrues at five percent per month. The penalty will keep growing until you file or it reaches 25 percent.
- Failure-to-pay – When it comes to unpaid taxes, the IRS is a little gentler. You will owe one half of a percent per month if you owe money and miss the deadline.
As you can see, these penalties have the potential to add up quickly. The last thing you need is another bill, so it’s always better to stick to the deadlines if you can.
Why you should file your taxes early
There are a few reasons why filing early is a good idea. For starters, if you are expecting a refund, the money will get into your hands sooner. Or, if you owe money, filing early may give you more time to pay. This may help you avoid the failure-to-pay penalty.
Getting your refund
faster and steering clear of penalties are both good reasons to file sooner,
but avoiding identity theft is a bigger deal. In the era of major security
breaches, it’s easier than ever for someone to access your Social Security
number. They can use this info to file a fraudulent return and claim your
refund. You may not even realize there is trouble until you try to e-file.
Filing earlier is one way to reduce your chances of becoming a victim.
If you know there is a problem, don’t panic. You can submit a complaint directly to the FTC at identitytheft.gov, put fraud alerts on your credit reports, and contact your banks. If you receive a notice from the IRS, respond immediately. The last step is filling out Form 14039 — the official Identity Theft Affidavit — attach it to your tax return, and send it to the IRS.
Set a tax deadline reminder (or two!) now
Life is complicated enough without taxes. By setting reminders, you will improve your chances of meeting the deadlines. After all, no one likes chasing refunds, or worse, owing penalties. Eliminate future headaches before they happen by filing on time. You will sleep better knowing you have one less thing to worry about.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.