Back when most people filed their taxes by mail, post offices
offered extended hours--and sometimes live entertainment--on April
15 to accommodate anxious taxpayers who waited until the last
minute to file their returns.
These days, post offices are a lot quieter on Tax Day because
most taxpayers file electronically. But even if you file from the
comfort of your own home, the annual tax deadline is no less hectic
or stressful if you got a late start. Some advice:
Don't Panic if You Don't Owe
If you, like most taxpayers, are due a refund, there's no
penalty for filing after April 15. That's because late penalties
are based on the amount you owe the IRS. The main drawback if you
don't file on time is that you'll have to wait longer for your
check from the IRS--all the while
risking losing your refund to tax ID theft
There are a few instances that require on-time filing even if
you don't owe. For example, if you converted a traditional IRA to a
Roth in 2013, you have until Oct. 15, 2014, to undo the conversion
and avoid paying taxes on it--but only if you file your 2013 return
by April 15 or request an extension.
Consider Filing an Extension if You Do Owe
To request an extension, file
. You can do it by phone, online or by mail. An extension will
automatically extend your filing deadline until Oct. 15. Keep in
mind, though, that while an extension gives you more time to file,
it doesn't give you more time to pay.
If you can't pay in full by April 15, consider an IRS
installment plan, which will allow you to make monthly payments.
You'll have to pay a set-up fee of $120 ($52 if you arrange for
automatic debit from your bank account), an interest rate that's
adjusted quarterly (currently it's 3%) and a monthly 0.25%
late-payment penalty. (More information from the IRS on payment
is available at this link
If you can't pay what you owe, you still should file a tax
return or an extension by April 15. You'll owe underpayment
penalties of 0.5% a month of the unpaid balance, up to 25% of the
amount you owe, plus interest. But if you pull the covers over your
head and ignore the filing deadline entirely, you'll rack up
steeper failure-to-file penalties: 5% a month, up to 25% of the
Whether or not you can pay right away, giving yourself more time
to file will reduce the likelihood that you'll make common
mistakes, such as using incorrect bank account numbers for direct
deposit, which could cause your refund to land in someone else's
account. Good luck recovering your money if that happens.
You may need to request an extension from your state, too. Some
states automatically grant an extension if you request one from the
IRS, but others require you to file a separate document. Check with
your state tax department for more information.
In Your Rush, Don't Overlook Big Tax-Saving Deductions and
If you're determined to file by April 15, one of the easiest
ways to avoid overlooking tax breaks is to review last year's tax
return for similar deductions you can claim on your 2013 return,
says Greg Rosica, contributing editor to the EY Tax Guide 2014. Go
over the income section of your 2012 tax return, too, to make sure
you haven't overlooked 2013 income reflected in a missing 1099 from
your bank or other financial institution.
Not bothering to itemize? Don't assume you're ineligible for tax
breaks. There are a handful of tax breaks you can claim, such as
moving expenses and up to $2,500 in student-loan interest, even if
you use the standard deduction.
Don't Sweat the Small Stuff
Don't waste time--and distract yourself from bigger potential
write-offs--documenting deductions you probably won't be able to
claim anyway. For example, it's unlikely you'll be eligible to
deduct your out-of-pocket medical expenses. That's because you must
itemize to claim this deduction, and you can only deduct
unreimbursed medical expenses that exceed 10% of your adjusted
gross income (7.5% if you were 65 or older on Dec. 31, 2013).
Ditto for charitable contributions if you're not itemizing.
Unless you were extraordinarily generous in 2013, you probably
won't have enough itemized deductions to exceed the standard
deduction, which is $6,100 for single taxpayers under age 65 and
$12,200 for married taxpayers who file jointly.