In 2012, the deadline for filing personal income taxes is Tuesday, April 17th. The traditional deadline is April 15th, but since that’s a Sunday and Monday the 16th is Emancipation Day (a holiday observed by the District of Columbia), the Internal Revenue Service (IRS) delayed the date until the 17th.
So, hooray, we all get an extra couple of days to procrastinate.
According to the IRS, more than 144 million individual tax returns are expected to be mailed in by the deadline. Of course, there are those who will push the envelope. Still, you can avoid late filing penalties if you request an extension. IRS Form 4868, the “Application for Automatic Extension of Time” provides you with an additional six months to file a return. However, the extension is only available to taxpayers who plan to file forms 1040, 1040A, 104EZ, 1040NR, 1040NR-EZ, 1040-PR or 1040-SS or a 709 gift tax return. What’s more, the extension paperwork must be filed by April 17, 2012.
Taxpayers who ignore the filing deadline are subject to penalties. The amount of the fee depends on how much money is owed to the government and how long the money owed to Uncle Sam has been overdue. If you owe money to the government and you fail to file by the April deadline, you will be penalized five percent of what you owe for each full or partial month you are late. The maximum penalty is 25 percent. You will also incur a penalty if your calculations are off and you end up paying less than you really owe by the deadline. However, you will not have to pay the penalty if you file an extension and fork over at least 90 percent of your estimated tax liability.
Just remember, even if you don’t have enough money to pay the IRS, you should still file to avoid penalties. The good news is that the government will work with you to set up an installment agreement whereby you can pay off your tax debt over time.