Important Deadline Approaching – Personal Tax Returns
“It’s almost the deadline
Don’t miss the deadline, darling
When all your bad dreams will come true
Don’t miss the deadline
It’s almost the deadline, darling
I wouldn’t want it to happen to you.”
— Blue Oyster Cult – “Deadline”
So once again a very short blog entry but one that is quite important:
File your personal tax returns on time. The deadline is April 15th – just over two weeks away!
The IRS makes failing to file on time quite costly. The failure-to-file penalty is 5% of your tax liability per month that you do not file (capping at 25%)! That is some of the most expensive money you can “borrow” – since it the equivalent of paying a 60% annual interest rate for those five months.
If you file on time or extend the return but cannot pay the taxes due, you will get charged with the failure-to-pay penalty. That penalty is 0.5% per month on the tax owed (again capping at 25%) – plus interest. While this can still end up being costly over time, it is substantially less than the failure-to- file penalty. I’m not a fan of paying any penalties or interest when it can be avoided, but sometimes we have no choice but to borrow money – or in this case “borrow” the money from the IRS by putting off paying the amount due for a reasonable period of time
So:
- Ideally – If you are able, get your return filed and paid on time. No interest, no penalty.
- If for some reason you can’t pay the tax due right now, at least get the return filed on time and pay as soon afterward as you can. Do not pay the “loan shark” rate that comes with the failure-to-file penalty. Please.
- If you can’t get the return filed by April 15, at least file an extension and avoid the above-mentioned terrible penalty.
- But do not just let the due date come and go without doing something. The cost of doing so can be tremendous. Give me a call so that I can help you formulate the best approach and get everything squared away.
Who knows? Maybe I’ll even be able to determine that you have money due to you in the form of a refund.
Bad pun alert: let me make this April 15 less “taxing” for you.
Groan…that really was a bad one. I regret it.
IRS Circular 230 Notice: To ensure compliance with requirements imposed by the IRS, we inform you that any federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.
