Some taxpayers are still racing against the clock.
The tax deadlines have quickly passed and some Americans have yet to file their tax return. If you’re one of many taxpayers who have questions about how to file a late 2017 tax return, keep reading!
Can I still e-file my 2017 tax return?
October 15, 2018; the e-file and extension deadline, has passed. Therefore, your 2017 tax return becomes a prior year return. This means that you cannot e-file your 2017 tax return.
You are required to print, sign and mail your tax return to the IRS along with copies of your income statements. Most importantly, you can no longer file an extension, since you must have filed it by April 18th.
I’m due a refund and I missed the tax deadline.
If you are due a refund, there is no penalty for filing your tax return late. However, you have a limited amount of time to claim your refund. The IRS statute of limitations places a three year time-frame within the original due date of your prior year return.
For example, you can no longer claim your 2014 refund since April 17, 2018 has passed which was the original due date of your 2014 tax return. You must have postmarked your tax return by April 17, 2018 to claim your refund.
Unpaid taxes means hefty IRS penalties.
There are two penalties when missing the tax deadline your tax liability. First, you will be hit with the failure-to-file penalty if you did not file your tax return by the tax deadline.
You will need to pay 5% of your tax liability per month or part of the month, up to a maximum of 25%. The second is the failure-to-pay penalty which is not paying your tax liability by the deadline.
For every month or partial month that you owe the IRS money, you’ll be penalized 0.5% of the unpaid amount which could build up to the maximum of 25%. In the case that you are facing both penalties, the maximum amount for those two penalties per month is 5 percent.
Regardless of an extension or not, if you have a tax liability, you MUST have paid it by April 17th, 2018. In other words, a tax extension asks how much you estimate that you owe to the IRS. That means at the end of the day, you are still paying the IRS your tax liability even if you are planning on filing later.
For more information on IRS penalties, click here.
Were you unable to file your taxes?
If you have a reasonable cause as to why you could not file your tax return or pay your tax liability, you may receive penalty relief. However, if you have a lack of funds, it is not a reasonable cause for failing to file your return on time. On the other hand, it may justify your failure-to-pay penalty.
Reasonable causes would be:
- fire, casualty, natural disaster (or other disturbances)
- the inability to obtain your records
- death or serious illness
- unavoidable absence of a taxpayer/member of the taxpayer’s immediate family
Let’s say that the IRS considers granting you penalty relief.
If they do, they will request information to question the validity of your reasonable cause. For instance, they will need to know the time frame of the event. Take into account that they will want to know how it affected your ability to finish/pay your taxes and how it interfered with your daily responsibilities.
Lastly, they want to see if you made an effort to file your taxes. This means that they want to see what actions you took after the situation changed to file your taxes. As evidence of your reasonable cause, you will need documentation from the hospital, court, record of a natural disaster or other events with start and end dates.
RapidTax has your back.
With Rapidtax, all you need to do is create an account, enter your tax information, and submit your account to us so we can prepare your tax return. Then, you just download a PDF of your return, print, sign and mail it to the IRS, all within minutes. What are you waiting for?