Don’t wait until the last minute to file your 2017 tax return.
April 18th has passed for the 2018 tax season deadline. However, you can still e-file your tax return until October 15, 2018; the e-file and tax extension deadline. Even if the 2018 tax deadline has passed, those with refunds can still e-file their tax return without any penalties.
On the other hand, individuals with a tax due may end up facing interest, late filing penalties, and failure-to-pay penalties. We advise that you file your tax return as soon as possible so you receive your refund faster.
Can I still file a tax extension?
Unfortunately, the answer is no.
The last day to file your tax extension was April 18, 2018. Regardless, even if you did file a tax extension by April 18, 2018, you would still have to pay your tax due to the IRS. Just because you filed a tax extension, doesn’t mean that you have extra time to pay your tax liability.
Let’s take a look at the process of filing an extension.
If you expect to have a tax due, you must file Form 4868 along with the payment of your estimated tax due. Once you do so, this grants your extension so you will have until October 15, 2018, to file your tax return.
On the bright side, if you have a refund, you don’t need to file an extension at all! You can file your tax return without any penalties and interest. In order to claim your refund, ensure that you stay within the three-year statute of limitations to receive your refund.
Beware of penalties and interest.
Be careful, because each month that your tax goes unpaid, you are hit with 0.5% of the failure-to-pay penalty. You are also charged with 5% of a late filing penalty. On top of that, it can increase up to the maximum of 25% of your tax liability, including interest.
If the 5% failure-to-file penalty and the 0.5% failure-to-pay penalty both apply in any month, the maximum penalty amount charged for that month is 5 percent of your tax due to the IRS.
If you can’t afford to pay your tax due right away, there are options for you.
|Payment Plan||Cost to Apply Online||Cost to Apply by phone, mail or in person||Extra fees|
|Direct Pay (Full amount you owe in one payment)||$0||$0||Fees apply when paying by card.|
|Short-term payment plan (120 days or less)||$0||$0||Plus penalties, interest and paying by card.|
|Long-term Installment Agreement (More than 120 days through automatic withdrawals)||$31 setup fee (low income: setup fee waived)||$107||Plus penalties and interest|
|Long-term Installment Agreement (More than 120 days)||$149 setup fee (low income: $43 setup fee that may be reimbursed if certain conditions are met)||$225||Plus penalties, interest and paying by card.|
You have a few ways you can pay your tax due to avoid too many penalties. Overall, you can choose to pay your tax due directly to the IRS, which may be a cheaper option for you when thinking about the extra set up fees.
E-file your return now!
You can e-file your 2017 tax return until October 15, 2018. However, we highly advise you pay your tax due to the IRS as soon as possible to avoid paying extra on penalties and interest. Create your 2017 account now to file your tax return.