Filing Taxes After the Deadline

It’s been nearly two weeks since the deadline to file your 2011 income taxes. If you missed the deadline, you’re likely in a panic and may not be sure what to do. The reality of the situation is that you’ll likely face penalties and interest (assuming that you owe) but you can minimize the damage by acting quickly.

Here are some tips for those that missed the filing deadline:

• File as soon as possible. If you owe money, penalties and interest are accruing as we speak. The sooner you file, the less you’ll have to pay.
• Pay as much as you can. If you can pay the full amount due, great. Do so. But don’t be surprised if you receive an additional bill for the penalties and interest. If not, then pay as much as you can and apply for an installment agreement (use Form 9465) to pay the rest.
• Plead your case. The law allows the IRS to reduce/remove penalties (but not interest) based on “reasonable cause.” There’s not a lot of guidance as to what’s acceptable here but, if you have a legitimate excuse, it can’t hurt to ask. You’ll need to produce a written and signed (under penalty of perjury) statement detailing the facts.
• File to claim your refund. If you don’t owe anything, you should still file in a timely fashion. There won’t be any penalties either way (since the penalties are based on how much you owe) but you won’t get any refund that might be due until you file.
• You can still e-file. E-filing is actually available up through the extension deadline (October 15, 2012).
• You can still Free File. If your income is $57k or less, you can use the IRS Free File program. If not, you can use the free fillable forms or any of a number of other tax prep methods (including pen and paper).

Finally, if you’ve already filed, but you dropped it in the mail late, you might be okay. Rumor has it that the IRS doesn’t bother checking postmarks, so if it was only a couple of days late, you may be in the clear. Just keep an eye on your mailbox for any tax bills that might show up — and keep your fingers crossed.

Also, as a reminder, the penalty for “failure to file” is more severe that the penalty for a late payment. Thus, in the future, you should file your return on time (or at least request an extension).

And now… Grab a red pen and circle April 15, 2013 on your calendar. That’s the deadline for filing your 2012 income taxes.