This is the time of year when a lot of people start thinking about taxes. Most people remember that April 15 is some sort of “magical” date when it comes to taxes, the income tax deadline.
April 15 is the deadline for filing many types of tax returns, including personal Forms 1040 income tax returns. This year April 15 comes on a Saturday. So, you get an extra week-end to get your tax return done and filed. Tuesday, April 18 is the deadline this year.
You can obtain a 6-month extension of time to file your federal return by requesting it via the appropriate form. However, that extension is just for time to file – it is NOT an extension of time to pay. You are still supposed to pay by April 15 ALL the tax you owe.
But, you say, “I don’t know how much I owe because I have not done my return. So, how can I pay what I owe?” And, ”What happens if I don’t file or if I don’t full pay on time?”
To figure out an estimate of your tax liability, you can do a preliminary return using the best information you have and making a best estimate for information you know will be coming but that you do not have yet. This will not be 100% accurate, but should give you a reasonable tax liability number.
Another way to approach the problem is to compare your 2016 income and expenses with your 2015 income and expenses. If they are about the same, and if you have not had any major life-style changes such as a marriage, divorce, birth of a child, purchase or sale of a residence, then your 2016 tax liability is likely to be about the same as your 2015 liability. You can then use that information in conjunction with the withholding shown on any W2s and 1099s to determine the payment you should send with your extension request.
Or, you could just guess what you should send in with your extension request. This approach is not recommended, but it is one that many people use.
But what happens if you don’t file your return on time or don’t pay the tax due on time?
Well, you will incur penalties that can be as much as 47.5% of the unpaid tax, plus interest on the unpaid tax and penalties. But, that is a topic for another day.
As the Income Tax Deadline Approaches, Contact a Tax Professional for Help
If you have any questions at all about how to handle your particular situation, you should contact a tax professional for assistance. Making that contact sooner rather than later is very important. But, at the time you are likely reading this, early April, expect the tax professional to “put you on extension” and get back to you after April 15. If you need a referral to someone to help with your tax situation, contact the Sodowsky Law Firm, PC at 703.968.8000.
