The tax deadline 2012 is quickly approaching and I’m sure many of you who were scheduled to receive a tax refund have already filed and even cashed your refund check. But for those of you that owe money this year, the looming deadline isn’t going away. So if the tax filing deadline for 2012 taxes is April15th what does that really mean for filing and submitting your return and/or payment?
The Postmark Date
The good news is that a tax return delivered to the IRS by U.S. mail after the due date for the tax return is considered timely filed if the tax return was postmarked on or before the due date of the tax return. This is good news because that means you don’t have to submit your filing and payment a week in advance just to be sure it is in their hands by the deadline. So if you want, you can actually wait until the 15th to get everything in the mail provided the postmark on the envelope shows the 15th. While you can wait until the very last day to do so, I would recommend still mailing a day or two early just to be safe in the event of something coming up that doesn’t permit you to get to the post office or meet the last postal pickup for that day in order to get that day’s postmark.
What About Extensions?
If you filed an extension, you are not off the hook. This extension is simply for filing the paperwork, not the tax payments you owe. If you have waited this long and still don’t know roughly how much you will owe I urge you to find out as soon as possible. You will still need to have your payment, or at least an estimated payment postmarked by the 15th in order to be considered as on time even if you have filed an extension or plan to file one.
The extension will at least prevent you from receiving a late filing penalty on your paperwork but interest will be charged on unpaid tax from the original due date of the tax return. So it is important to send at least an estimated payment before the deadline even if you have filed for an extension so you can avoid as much interest as possible. Here are a few options if you find you can’t pay your taxes by the time they are due.
In addition to interest, there is an issue with late payment penalties as well. This means it is very important to know fairly close to how much your payment will be. The IRS will not impose a late payment penalty so long as the estimated payment you send is at least 90% of the actual payment you owe and that the remainder of the payment is submitted before the end of the extension deadline. So, if you expect your tax payment to be around $1,000 don’t send them a check for $200 as an estimated payment while you continue to work on your return in the extension period.
What You Can do to Avoid Payment Problems Next Year
If you are employed and have taxes withheld each paycheck, the first plan of attack is to adjust your tax withholding. This is done via form W-4 which you should get from your employer and then notify them of any changes. I talked about how to calculate and update your withholding in the past, and this is the best way to make paying your taxes manageable.
If you are self-employed or already file quarterly estimated taxes then it is up to you to make sure you are putting enough money aside to make the appropriate payments each quarter so you aren’t stuck with a bill at the end of the year. Understandably this can be difficult to do when you have income that fluctuates, so the best you can do is estimate what you will owe to the best of your ability. If possible try to withhold a bit more than you think you may need to so that any unexpected changes in income or expenses later in the year won’t throw you off. It is better to err on the side of caution and get a small refund at the end of the year instead of a surprise tax bill.
Doing your own taxes can be an effective way to save time and money. Using the popular tax software H&R Block at Home or TurboTax, you can even start your tax preparation online for free. Then if you decide to, you can purchase the full version and even e-file right online. Getting a head start will ensure you don’t run too close to the tax deadline.
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