In the News: You Missed the Deadline to File Taxes, Now What?
As I’ve mentioned previously on this very blog, I am a procrastinator by nature. My ‘to do’ list from January of this year is littered with winter-related items (two prime examples are ‘purchase warmer jacket’ and ‘book ski trip for President’s Day weekend’) that I simply didn’t get around to. In those instances, I can shake my head, let out a self-pitying sigh and put it off until next year… But if you missed the April 15 deadline to file either your federal income tax return or an extension, you don’t have the luxury of simply waiting until next year – the time to act is now.
Melissa Labant, AICPA director of tax advocacy, speaking to the New York Times Bucks Blog, advised taxpayers to file as soon as possible and to avoid falling into the trap of thinking ‘oh, the deadline passed so there’s no rush now.’
There are two reasons to get this out of the way as soon as possible. If you’re owed a refund you won’t be charged a late filing penalty, but it’s your money and can be better put to use if it’s in your wallet. And with a recent AICPA survey showing that this year taxpayers are relying on their refunds more than in the past, it makes good financial sense to put that money to work.
If you owe the IRS money, filing as soon as possible after the deadline will lessen the impact of the late-filing or late-payment penalties and interest, which will save you money.
Normally, if you file your return late, you’ll receive a notice of penalty from the IRS. And while they will not typically waive the interest due on any taxes owed, if you can prove that you had a reasonable cause for filing late, it is possible they will reduce the penalties.
At that time, you or your CPA can respond with a “Dear IRS” letter, explaining why you filed late and why you think you are eligible for an abatement of the penalties, Labant said.
One word of caution: your filing history can either help or hurt your case. Taxpayers with a record of paying in full on time stand a better chance than those who have claimed ‘the dog ate my tax return’ the past 5 years in a year.
Once you’ve settled your 2012 taxes, don’t simply decide to wait until next year to start the process again - taxes aren't just about meeting the April 15th deadline. Establishing year-round tax planning strategy can help you achieve your financial goals. The guidance from a CPA can help you get the most from your financial resources and charting the course to financial security.James Schiavone, AICPA Staff.