You’re not alone if you wait until the last minute to file your federal tax return. More than 45 million people waited until April to file for tax year 2017. For context, that is more than the entire population of California and Oregon combined filing last minute.
Some people delay filing because they want to avoid the process, especially if they know they’ll owe money.
“Nobody likes to deal with taxes,” said Jonathan Barsade, founder of Exactor, a sales-tax compliance software company recently acquired by Intuit. “There’s a thought process: ‘Maybe if we delay it long enough, it will go away.'”
You can’t ignore the tax-filing deadline, though, because you’ll face civil or criminal penalties if you don’t file a return. Here are the last-minute tax tips and deadlines you need to file on time — and your options if you can’t.
1. Know the Tax Deadline
The deadline to file your 2018 personal income tax return is April 15. However, residents living in Maine and Massachusetts have until April 17 to file their income tax return because April 15 is Patriots’ Day and April 16 is Emancipation Day.
2. Have All the Necessary Documents
During the first few months of the year, you’ll probably receive several tax-related documents. These can include:
- A W-2 form from your employer
- 1099 forms from other sources of income, such as interest or dividends, or contract or freelance work
- A 1098 form showing mortgage interest paid off by at least $600 if you’re a homeowner
- Form 1098-E showing student loan interest paid off by at least $600 if you have federal student loans
- 1095 forms showing health insurance coverage
- Receipts for charitable contributions
Gather these documents together before you sit down to start your return.
3. Know Which Health Coverage Form You Need
Three versions of Form 1095 exist: A, B and C. Form 1095-A will be sent to you if you get your health insurance through the Health Insurance Marketplace. You will need this form to file your tax return. You will receive Form 1095-B if you purchase your coverage directly from an insurer, and if you are covered by an employer plan, you will get 1095-C. Those two forms are not needed to file your return, so if you’re getting one of those, you don’t need to wait for it to file.
4. File Electronically
Filing your return electronically, known as e-filing, is the easiest, fastest and most reliable method. You can file taxes online for free with IRS Free File if you make less than $66,000. If your income is higher or you have a particularly complex return, there are a number of reasonably priced tax preparation software programs or services you can use. You can also use a paid tax preparer who is authorized to e-file, although if you’ve waited until the last minute to file, you might have trouble finding one who can fit you into their schedule.
Many software programs will let you file your federal return for free but charge you to file your state return. Read the fine print before you make your choice.
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5. Import Your Data
You can import your data into most tax software programs, saving you time and reducing errors. If your employer or financial institution makes this option available, you enter some basic information and the program retrieves the details of your W-2 or 1099 form. If you use the same tax software you used last year, you might also be able to import some of your personal data.
6. Reference Last Year’s Return
If you’re not using the same software program you used last year or are filling by paper, Barsade recommends using the last return you filed as a benchmark for this year’s return. If your tax situation hasn’t changed much, you should have a good idea of what your income will be, the deductions you can claim and which forms you need to file.
7. Consider Making an IRA Contribution
You can make a deductible IRA contribution right up until the filing deadline, so you can contribute for 2018 until the last day to file taxes on April 15, 2019. When you contribute to an IRA, you can deduct the amount of your contribution from your income, which means you’ll pay tax on a smaller amount.
You can contribute up to $5,500 for the 2018 tax year, plus an additional $1,000 “catch-up” contribution if you are over 50 years old. You can deduct your contribution if you meet certain requirements, like not having a retirement plan at work.
8. Beware of Careless Errors
Double-check your return and have someone trusted review it, too. Because you’ve waited until the last minute to prepare your return, you’re more likely to make mistakes, Barsade said.
Be especially careful when entering numbers, including Social Security numbers. Tax software will alert you of math errors, but it won’t detect whether you’ve entered numbers incorrectly, said Barbara Weltman, president and founder of the financial company Big Ideas for Small Business.
9. Take Breaks
Even if you’re down to the wire, don’t try to complete your return in one sitting, particularly if it’s complicated.
“Take breaks,” Barsade said. “Don’t sit for eight hours straight. Your eyes are going to glaze over.” Stepping away occasionally from your return will help you come back with a fresh set of eyes and, hopefully, avoid making mistakes.
10. Know the Steps to Take If You Can’t Complete Your Return on Time
If you can’t meet the April 15 deadline to file your federal return, you can request an automatic tax extension from the Internal Revenue Service with a Form 4868, Weltman said. You can access the form and file it electronically through the Free File link on IRS.gov. Although you can only file your return with Free File software if your income falls below a certain level, anyone can file for an extension for free using one of the software programs.
11. Pay What You Owe, Even If You File an Extension
An extension will give you more time to file your return and help you avoid a late-filing penalty, but you’ll still have to pay what you owe by the April 15 filing deadline to avoid late-payment penalties and interest, Weltman said.
If you file for an extension, make sure you file your return and pay any tax owed by the tax extension deadline, which is Oct. 15, 2019.
12. File Even If You Can’t Pay Your Tax Bill
“Don’t let your inability to pay prevent you from filing on time,” Weltman said. Avoiding filing your return because you can’t make a tax payment will only make matters worse. There are penalties for filing taxes late.
If you owe but can’t pay, you can limit the damage by filing your return on time. The failure-to-file penalty is 5 percent of the tax owed each month your return is late, up to a maximum of 25 percent. If you file but do not pay, you will be charged just a 0.5 percent penalty on what you owe each month until you’ve paid it off.
If you can’t pay your entire tax bill, pay as much as possible. You can reduce additional interest and penalties if you pay as much as you can with your tax return, according to the IRS.
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13. Know What to Do If You Owe But Can’t Pay
If you can’t pay what you owe by April 15, you can probably apply for an IRS installment plan.
“Do it in a pre-emptive way — don’t wait for assessment,” Barsade said. “If you can convey the message to them that it was an honest, one-time mistake, they’ll work with you. My experience is that the tax agents are not out to get you.”
If you’ve filed your return and owe less than $50,000 in tax, penalties and interest you can apply for the IRS Online Payment Agreement— which allows you to avoid the hassle of calling the IRS or visiting a field office to apply. You also can apply online as a short-term option if you owe less than $100,000 in combined tax, penalties and interest. The IRS will let you know immediately whether your application has been approved, Weltman said.
14. Start Planning Now for Next Year
Don’t make skipping the tax return deadline a habit.
“This process should be a lesson going forward,” Weltman said.
Keep tax-related documents organized throughout the year and collect tax forms in a folder as they come in during tax season so you don’t have to scramble to meet the tax-filing deadline. And make sure you have the funds available to pay your tax bill by opening a separate savings account for taxes and setting money aside each month, Barsade said. “When tax season comes, you’ll have the money you need,” he said.
15. File Any Delinquent Returns Now
If you have delinquent tax returns that you should have filed in past years but didn’t, you should get ahead of those now as well. If you skipped a year or two, it will catch up with you down the road, so get your house in order now.
If you have a legitimate reason why you didn’t file a return in a previous year, you might be able to avoid some penalties. Avoid making poor excuses for not filing, because the IRS has probably heard them all. Your best strategy might be to fall on your sword, admit your wrongdoing and correct the mistake by filing now.
Get on top of your taxes as soon as you can, because they won’t go away. Following these last-minute tax tips for late filers will help make tax filing easier and help you get a jump on next year.
Click through to read about what to do when you can’t pay your tax bill.
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Cameron Huddleston contributed to the reporting for this article.