Save Yourself From Getting Late Filing Penalties For The 2008 Tax Season
By:
Jeff Parrack
It has always been a good financial practice to pay your bills on time, especially when you owe the IRS. If you have a simple, straightforward return, such as a one-page 1040EZ or two-page 1040A, there should be very few things outside your control to make your filing late. If you don't have your W-2 forms back by February (they are due to you at the end of January), you have more than two months to get them. Simple tax forms are, well, simple, as well as quick to fill out and file, a process that can be done online, occasionally for free.
On the other hand, there may be things outside your control if you have a somewhat more complicated return to file. You need information on all your interest income, charitable donations, business expenses and everything else that you will itemize, and you have to have all the appropriate forms, too. This latter problem has been solved by the Internet, of course, as you can get any needed tax forms online, along with decent instructions about how to fill them out. Still, what can you do to save yourself from getting late filing penalties for the 2008 tax season?
Plan ahead, mark the calendar
Any kind of IRS penalty is a bad one, simply on general principles, but since certain IRS penalties can increase your total tax bill by up to 50% it is crucial to have your tax-filing act together. This means you need to plan ahead and, if you expect to owe taxes on April 15th, have all the money together by then. Even if you end up filing for an extension, this additional time only applies to the filing of the tax forms. Regardless of anything else, your tax is due on April 15th, period. How can you ensure that you will make the deadline?
First of all, if you are in the same job as you had last year and have only one employer, you should be fine, unless you earned other monies, had interest income or collected unemployment insurance. If you have your W-2 on time, make sure you get all your other paperwork from your bank, investment account or other source in time for filing. Also get your forms nice and early, and if you are using a certain one for the first time (for daycare credit, Alternative Minimum Tax, etc.) make sure you look it over and check the instructions before, say, April 14th. Don't leave questions for the last minute, whatever you do.
If you tend to let things get away from you sometimes, set up some "ticklers" to remind yourself that tax filing time is on the way. Mark your calendar to show February 1st as the date by which you should have received your W-2's and other income, interest or expense paperwork. Set your preparation time for a reasonable date in February or March, and confirm a week beforehand that you do, in fact, have all the forms and information you need to file your return.
When all else fails
To avoid interest and penalties you have to file your return, and pay any taxes due, by April 15th. But what if you don't have all your paperwork in order? What if you know what your charitable donations totaled but lost the receipts and had to request new ones at the last minute? What if it came time to do your return and you're missing some important backup documents?
Luckily, there really are human beings working at the IRS and they know how things sometimes go wrong. If you are filing a similar return to previous years, you should know whether you owe something or not, and if things didn't change dramatically in 2008 you will probably be paying very close to the same amount. But you just can't mail in a payment without any paperwork. You need to file for an extension, using Form 4868.
The slow way and the fast way
Regardless of what previous years' returns were like, you need to make a good faith effort to estimate, and then write a check for, the amount you believe you will owe when you finally do file for tax year 2008. You can download the form, fill it out, put your check with it, stuff it all in an envelope and entrust it to the U.S. Postal Service. Have you noticed, though, how strongly the IRS has gotten behind "electronic filing" via the Internet? They like the new technology because it is fast, efficient, effective and maintains a digital trail, the new and improved equivalent of the old-fashioned "paper trail."
You can put that instant-on technology to work for yourself, too, by using an online extension filing service. Your extension will be filed immediately, often in a fraction of a minute, and the reputable services can successfully accomplish the extension filing for taxpayers from any state. All you have to do is mail your payment in separately, with the proper notations-first, that you've filed for an extension, and second, your Social Security number. That's it. You now have an additional six months, until October 15th, to file the actual return, which is great news if you need to chase down those records or get additional copies of ones you've misplaced. The even better news is that you still file your return electronically, over the Internet, saving yourself yet another stamp! About Author: Online IRS Extension.com has designed and developed Internet Tax Forms and Services that provide accuracy and convenience at an affordable price. For all your tax extension needs, visit us online at http://www.onlineirsextension.com/ today.
