The Price You Pay If You Don't File Today!

The Price You Pay If You Don't File Today!

Wednesday, April 15, 2009

filed under: danielle hoston

Taxes: Of life's two certainties, the only one for which you can get an automatic extension.
~Author Unknown

Danielle Hoston: Nobody likes to do their taxes. Well ... I guess tax accountants and those of us expecting refunds actually enjoy doing taxes but the rest of us look forward to our taxes just about as much as our dental appointments. Keep this information in mind before letting today's deadline pass you by:

You will avoid the "failure to file" penalty if you at least file a "Request for Extension" on your tax return. Take 5 minutes and fill out Form 4868 online.
Filing an extension for your tax return is not an extension of your payment deadline. While you will not be penalized for failing to file, you will accrue interest on the amount of tax owed. The current interest rate for unpaid federal income taxes is 5% per month of the net tax due. These interest rates adjust on a quarterly basis.
If you cannot afford to pay your full tax liability, you have options. You can make a partial payment to avoid unnecessary interest or you can attach Form 9465 to your tax return and request an installment payment program.

Did you know?

You can check the status of your tax refund online. You can also call the IRS TeleTax System at 800-829-4477or the IRS Refund Hotline at 800-829-1954 for refund status.

There are approximately $1.3 Billion in UNCLAIMED REFUNDS from 2005. Unfortunately, there is a 3-year statute of limitations for collecting these refunds. If your 2005 tax return is not filed by today, April 15th, 2009, your refund will be forfeited.

Losses on investments like Ponzi schemes are treated differently due to the criminal element and the low probability of recovery. These losses are not subject to standard limitations on losses and can be used to offset taxes over numerous years.

Don't let the price of procrastination compound your tax liability more than necessary. The worst thing you can do is NOT COMMUNICATE with the IRS. Inevitably, a relatively small tax liability can become a huge nightmare when penalties, compounding interest, auditers, liens, and forced sales become involved. For more information, I strongly recommend seeking the advice of a tax professional or visiting IRS.gov.