As the deadline for filing your 2017 income taxes looms, you’ll want to start pulling things together – if you haven’t done so already. This includes getting your hands on a copy of your 2016 tax return and gathering W-2s, 1099s and deduction records. You’ll need these records whether you’re preparing your own return or paying someone else to do so.
Don’t procrastinate; the filing deadline for most individuals is Tuesday, April 17, 2018. That’s because April 15, the traditional deadline, falls on a Sunday, and Emancipation Day, a legal holiday in Washington, D.C., is celebrated on Monday, April 16. Unlike in some years, there’s no extra time for residents of Massachusetts or Maine to file because Patriots Day (a holiday in those two states) falls on April 16, the same date as Emancipation Day.
If you don’t think you can file your federal income tax return by the due date, you can get an extension using IRS Form 4868, the Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. This extension gives you an additional six months, until Oct. 15, 2018, to file your return. You can also file for an extension electronically using instructions in Form 4868.
However, filing for an automatic extension does not provide any additional time to pay your taxes. When filing for an extension, you must estimate the amount of tax you will owe and pay it by the April filing due date. If you don’t pay the amount you’ve estimated, you may owe interest and penalties. And if the IRS believes that your estimate is not reasonable, it may void your extension.
Special rules apply if you live outside the country or serve in the military outside the United States. In these circumstances, you are generally allowed an automatic two-month extension, to June 15, 2018, without filing Form 4868, though interest will be owed on any taxes due that are paid after April 17. If you served in a combat zone or qualified hazardous duty area, you may be eligible for a longer extension.
What if you owe? One of the biggest mistakes you can make is not filing your return because you owe money. If your return shows a balance due, file and pay the amount due in full by the due date, if possible. If there’s no way that you can pay what you owe, file the return and pay as much as you can. You’ll owe interest, and possibly penalties, on the unpaid tax, but you’ll limit the penalties by filing your return on time, and you may be able to work with the IRS to pay the remaining balance using options such as paying in installments.
If you’re getting a refund, most filers should expect a check to be issued within 21 days of the IRS receiving your return. But the IRS is stepping up efforts to combat identity theft and tax-refund fraud and the new, more aggressive filters may inadvertently delay some legitimate refunds.
BARBARA KENERSON is first vice president/Investments at Janney Montgomery Scott LLC and can be reached at BarbaraKenerson.com.