The 2016 tax filing deadline is finally upon us. Today, April 18 is the deadline by which U.S. taxpayers must file and pay their taxes for the 2015 calendar year. While the deadline is roughly the same each year, and shouldn't therefore be a surprise to anyone, some taxpayers may still not have all of their tax affairs in order.
Thankfully, the Internal Revenue Service does allow taxpayers to file for an extension of time by which they must file their taxes. For taxpayers who apply for the six-month extension, the tax filing deadline is pushed to Oct. 17, 2016. In order to apply for a tax filing extension, an individual should go to the IRS' website and fill out and submit Form 4868. Additionally, Connecticut residents who wish to file for a state tax extension will need to go to the Connecticut Department of Revenue Services website and file the appropriate electronic form.
While, when it comes to filing a tax return, the IRS allows taxpayers extra time; the same isn't true when it comes to paying taxes. That's right, even in cases where a taxpayer files for a tax extension; he or she must still pay by the tax filing deadline date. This rule is often confusing for many taxpayers who wrongly assume that they also have extra time to pay their taxes.
The IRS' failure-to-pay penalty is "normally five percent of the unpaid taxes for each month or part of the month that a tax return is late." Thankfully, the late payment penalty amount cannot grow to exceed 25 percent of the unpaid tax amount. However, even a five or 10 percent penalty can add thousands of dollars to an individual's tax bill. It's best, therefore, to consult the IRS' website and calculate and pay the amount of estimated tax owed.
Individuals who have questions or concerns about late filing and/or late payment penalties and the IRS' attempts to recover tax debt, would be wise to reach out to a tax attorney for advice and help.
Source: CBS, "Still not ready to file your tax return? Do this now," Ray Martin, April 18, 2016
IRS.gov, "What to Know about Late Filing and Late Paying Penalties," April 17, 2015