Cook Wealth Management Group

Running Late? Filing After April 15th

The original due date for tax filing was March 1, 1913. In 1918, it was postponed to March 15, where it remained until 1954, when it was finally extended to the date with which we’re all familiar.1 If April 15 was too early for you this year, here are a few options.

I Haven’t Filed My Return – What Are the Consequences?

If you file your return by May 15, and you owe no money, there’s a chance you’ll still be in the clear. (We do not recommend taking this chance.) However, if you do owe, and have missed the April 15th deadline, you will be subject to a 5% penalty for each month or partial month late. Additionally, you’ll be charged interest on the taxes due. (Although there is no penalty for failure to file if you are due a refund, you must file the return within 3 years of its due date in order to claim your refund.2)

How Do I File an Extension? Can I Still E-file?

Filing an extension is a viable option, but not always best. Remember you are requesting an extension to file your return, not an extension to pay taxes, so you should still submit at least an estimated tax payment with your extension request. Using Form 4868, you may paper file or e-file an extension. It’s also a good idea to enclose an explanatory letter with your returns and payment; if you convince the IRS of what they deem a “reasonable cause,” – not just “I forgot” – your penalty could be waived.3

Should I Amend?

It may be optimal to file your return and amend it later, rather than to file an extension. An extension gives you until October 15 to file your return; there is no deadline to amend a return.4

Can I Avoid a Tax Bill Next Year?

If you are employed, adjusting your tax withholding is the ideal way to manage your tax payments. Consult your tax professional, or ask your financial advisor to recommend one – so you can discuss the correct withholding amount for you. Though you may look forward to a hefty refund, resist the inclination to loan your money. Always aim for a small refund to avoid an unexpected tax bill.5

Note: This article is not intended to be a substitute for specific, individualized tax advice. Please consult your tax professional before making any tax-related decisions.……