- Days left

4 Things Tax Procrastinators Need to Know About Oct. 15

×
Tax Cheats
AP
April 15 is one of the most dreaded dates in America, as millions of taxpayers who waited until the last minute to prepare and file their tax returns rush to get them done. Yet given how easy it is to get a six-month extension -- all it takes is filing a single form -- it's surprising that Oct. 15 doesn't have an equally harried reputation.

According to the IRS, more than 12 million taxpayers filed for extensions this year, and many of them haven't yet filed their returns.

If you filed to get an extension back in April, then your extra six months of preparation time is almost over. Here are some things you need to keep in mind as you finally get to work preparing your taxes.

1. You Might Still Have More Time

Even though Oct. 15 is the last-gasp deadline for most taxpayers, some special provisions allow certain people to get even more time to file their returns. Members of the military who are serving in combat zones, including Afghanistan, usually have 180 days after they leave the combat zone in order to file returns and pay taxes. In addition, due to the devastating natural disasters in Colorado, taxpayers in certain counties affected by flooding, landslides, mudslides, and severe storms will have until December 2 to file.

Also, those who live out of the country might be able to get further extensions. Those who are outside of the country can request an additional two-month extension, which the IRS has discretion to accept or deny. For more on these extensions, look at IRS Publication 54.

Most people, however, won't qualify for these rare exceptions. In particular, don't expect a government shutdown to save you from the Oct. 15 deadline, as you will still be responsible for filing your return on time -- even if there aren't any IRS workers to offer you assistance with your return.

2. Can't Pay? File Anyway

Many taxpayers assume that if they don't have the money to pay their taxes, then there's no point in filing a return. But the penalties that the IRS imposes are much larger for those who don't file a return at all than they are if you file a return but can't pay on time.

Specifically, the IRS will charge you 5 percent of your unpaid tax bill every month that your return is filed late, up to a maximum of 25 percent. But if you file on time and merely pay late, that penalty is just 0.5 percent per month -- a tenth as much.

3. Didn't Pay in April? You Might Owe Penalties

Even if you got an extension back in April, you could still owe penalties if you show an amount due on your October return. That's because the automatic six-month provisions only give you an extension of time to file your return, not to pay the tax you owe. Even if you paid some of your taxes based on your estimated tax liability back in April, you could still be on the hook for penalties if you guessed wrong. Be sure to look at this information from the IRS to see if you qualify for an exemption from penalties.

4. Self-Employed Workers Can Get an Extra Tax Break

One way that last-minute filers get extra tax savings is by contributing to a traditional IRA. Unlike most deductions, which have to be based on actions taken before December 31, IRA contributions can qualify up until April 15. But even if you get an extension, regular IRA contributions can't qualify for 2012 tax year deductions after the April 15 date.

However, self-employed workers who have either an SEP-IRA or a solo 401(k) plan can make additional contributions for the 2012 tax year through the Oct. 15 deadline if they requested an extension on their taxes. So if you have self-employment income and are looking for an extra tax break, funding an already-existing SEP-IRA or solo 401(k) can save you some money.

Get Moving!

With less than two weeks before the deadline, you can't afford to procrastinate any longer. Use these tips as motivators to help you get your taxes done before it's too late.



You can follow Motley Fool contributor Dan Caplinger on Twitter @DanCaplinger or on Google+.

Increase your money and finance knowledge from home

Introduction to Retirement Funds

Target date funds help you maintain a long term portfolio.

View Course »

How to Avoid Financial Scams

Avoid getting duped by financial scams.

View Course »

TurboTax Articles

What is IRS Form 8824: Like-Kind Exchange

Ordinarily, when you sell something for more than what you paid to get it, you have a capital gain; when you sell it for less than what you paid, you have a capital loss. Both can affect your taxes. But if you immediately buy a similar property to replace the one you sold, the tax code calls that a "like-kind exchange," and it lets you delay some or all of the tax effects. The Internal Revenue Service (IRS) uses Form 8824 for like-kind exchanges.

What are ABLE Accounts? Tax Benefits Explained

Achieving a Better Life Experience (ABLE) accounts allow the families of disabled young people to set aside money for their care in a way that earns special tax benefits. ABLE accounts work much like the so-called 529 accounts that families can use to save money for education; in fact, an ABLE account is really a special kind of 529.

What is IRS Form 8829: Expenses for Business Use of Your Home

One of the many benefits of working at home is that you can deduct legitimate expenses from your taxes. The downside is that since home office tax deductions are so easily abused, the Internal Revenue Service (IRS) tends to scrutinize them more closely than other parts of your tax return. However, if you are able to substantiate your home office deductions, you shouldn't be afraid to claim them. IRS Form 8829 helps you determine what you can and cannot claim.

What is IRS Form 8859: Carryforward of D.C. First-Time Homebuyer Credit

Form 8859 is a tax form that will never be used by the majority of taxpayers. However, if you live in the District of Columbia (D.C.), it could be the key to saving thousands of dollars on your taxes. While many first-time home purchasers in D.C. are entitled to a federal tax credit, Form 8859 calculates the amount of carry-forward credit you can use in future years, not the amount of your initial tax credit.

What is IRS Form 8379: Injured Spouse Allocation

The Internal Revenue Service (IRS) has the power to seize income tax refunds when a taxpayer owes certain debts, such as unpaid taxes or overdue child support. Sometimes, a married couple's joint tax refund will be seized because of a debt for which only one spouse is responsible. When that happens, the other spouse is said to be "injured" and can file Form 8379 to get at least some of the refund.

Add a Comment

*0 / 3000 Character Maximum

5 Comments

Filter by:
donald.guerriero

Other than the threat of financial penalties can you provide us procrastinators a foolproof method of getting the taxes in on time? Procrastinating often comes from fear. Fear that the work is too hard, it has to be perfect, for example.
If there would be a simple system to follow, maybe it would be easier.

December 22 2013 at 4:11 PM Report abuse rate up rate down Reply
dodie1990

Too many deadbeats who don't file or pay. Pay up

October 04 2013 at 11:20 AM Report abuse rate up rate down Reply
papadon.don

Oh BIG DEAL!!! Oct 15 is only about FILING ... IRS got paid back in April. TOO much emphasis on filing. I know folks who haven't filed in YEARS.... IRS says OK, here's what ya owe. One case in point: Guy couldn't pay, so IRS said OK, you're exempt for 10 yrs!! MORAL OF STORY: Don't be scared of the big bad wolf!!

October 04 2013 at 9:43 AM Report abuse rate up rate down Reply
jrexmarda

File or not ,if you can't pay, zero still equals zero.

October 03 2013 at 6:32 PM Report abuse rate up rate down Reply
jdykbpl45

With things shut down, nobody will know or be able to tell.

October 03 2013 at 5:58 PM Report abuse rate up rate down Reply
betty_brock

Pay your bleeping taxes, already.

October 03 2013 at 4:52 PM Report abuse +1 rate up rate down Reply