It is April again and your taxes are due. The deadline this year has been extended to the 18th because the 15th falls on a Saturday, and Emancipation Day is being celebrated on the 17th.
What If You Are Not Ready to File by the 18th?
If you are not ready, you need to file a request for an extension via IRS Form 4868 on or before the 18th. (https://www.irs.gov/pub/irs-pdf/f4868.pdf). The IRS will only accept your extension application if it is sent on or before the deadline. If you owe tax and fail to pay the amount due by the 18th, you will probably owe interest and penalties.
You need to at least submit your return by the due date, if you do not have the means to pay what you owe by the 18th. This will substantially lower your interest and penalty obligations. It you file late and are entitled to a refund, there is no penalty for filing late. Bear in mind, however, that to receive your 2016 refund, you must submit your return within three years after the deadline for this year’s filing.
Penalties:  If you do not file by the due date, a failure-to-file penalty will probably apply. The IRS places a heavier penalty on filing after the due date than it does on paying late. If you fail to pay your taxes by the due date, the IRS usually imposes a penalty of one-half-of-one percent of the unpaid taxes. This penalty applies for each month or part of a month after the due date. Penalties begin accruing the day after the deadline.
On the other hand, failing to file carries a five-percent penalty on the unpaid taxes for each month, or part of a month the return is late. Penalties begin accruing the day after the tax filing due date. Thus, if you are going to pay late, your best bet is to file on time and submit the estimated amount you believe you owe.
Special Circumstances:  There are special circumstances for those serving in the military and for citizens living outside the country. There are also other issues to consider concerning penalties, such as ceilings on penalties and penalties for estimate underpayments. If you have questions concerning these issues, contact us. Our best advice is to avoid the need for filing late by hiring a tax professional.
Professional Tax Services is a locally-owned provider serving over 3,500 local residents and businesses. For more information call 661-259-1967 or visit www.scvprotaxservices.com. Through their complimentary EZ2 Thrive program, they provide unlimited free tax planning advice to their clients.