Tax Tip – The Deadline is Near

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As the tax deadline nears…our final set of reminders for your 2016 return.

Returns are due by Tuesday, April 18 this year. Even though Because April 15 falls on a Saturday, on Easter weekend, Washington, D.C. will observe its Emancipation Day holiday that day.

You have two options to get a six-month extension if you need more time:

  • File Form 4868 with IRS by the due date of your tax return, adding a check for any additional tax you expect to owe. But be careful not to lowball your estimate: If it is unreasonably low, IRS can void the extension. You can also e-file the 4868.
  • Or, for a fee, charge an extension-related tax payment on your credit card through an IRS-approved processor. In both cases, the new due date is Oct. 17.

If you can’t pay with your extension or when filing your return, file anyway.

Doing so avoids the 5%-a-month penalty for failing to file. This penalty is capped at 25% of the unpaid balance. The failure-to-pay penalty is far less…½% a month.

You can arrange for installment payments by filing Form 9465. The fee is $105 ($52 if you agree to wire payments). Low incomers will be charged $43. Of course, you still will have to pay interest plus the penalty for late payment.

Your IRA contribution for 2016 is due April 18, even if a filing extension has been requested. Payins by mail are OK if they are postmarked before April 19.