Well, Tax Day 2019 has come and gone. What do you have to show for it?
As one might expect, you probably fall into one of three categories following April 15: the Goal, the Reality, and the Worst-Case Scenario.
The Goal: You can boast an impeccably well-filed tax return, full of thorough and smart deductions that pushed you over the new standard deduction and ensured a sweet refund. You submitted early and have possibly already received your tax return. You’re feeling good and pity those who are racing to the deadline.
The Reality: You are one of those people who the first group pities, but hey—you made it! It was tough and you were tired at work on Tax Day, but at least that’s only because you spent the evening of April 14 feverishly completing your taxes. You crossed the finish line and that’s what matters.
The Worst-Case Scenario: You didn’t finish your taxes.
If you fall into the first two groups, congratulations! Finishing your taxes can be a—pun unavoidable—taxing process. You deserve to feel good, and we hope you’re proud of your work!
If you fall into the third group, we’ll get right to the point. We don’t need to explain to you the potential trouble that comes with filing your tax return late, and we don’t consider ourselves the “we told you so” types.
With that out of the way, we’re here to help. You may be wondering what comes next. What do you do now that you’ve missed the tax deadline, what consequences are you facing, and what steps can you take now—as well as preventative steps in the future?
We’re going to answer your questions as quickly and comprehensively as we can, so you can get your taxes back on track and lift this weight off of your shoulders as soon as possible.
Most likely, if you’re still reading this article, you’re probably in the camp of people who didn’t file an extension for their taxes. So first, we’re going to take you through the steps you should take to get back on the right track, right away.
You may already know whether you owe taxes. Perhaps you don’t! But the first thing you should do if you haven’t filed your taxes actually isn’t “file your taxes.” It’s to find out whether you owe the IRS any money or not.
Here’s why: The Tax Day deadline is less about filing your taxes than it is paying your taxes. For example, if you file for a tax extension, you are granted an extra six months to file your taxes. However, you still need to pay those taxes by the tax deadline in April.
If the IRS owes you money, you actually have a couple years to file and get access to your tax return. Why you’d want to leave that money on the table and not have it in your pocket, bank account, or to spend on vacation is beyond us—but you theoretically don’t need to take your return right away if you don’t want to.
On the other hand, if you owe the IRS money, you will already be accruing penalties and fees—so you should learn right away whether or not you owe taxes. Conveniently, you can find out pretty easily when you file your taxes or hire someone to help you file them.
This step should be obvious. If you haven’t paid your taxes and owe the IRS, you need to find out what your tax obligation is including any penalties and fees and pay it right away. The longer you wait, the greater this total will be, and it’s one reason that many taxpayers end up with tax liens or wage garnishments.
Whether you file at the same time you pay or not, you should also just file your taxes. Typically, filing your taxes will give you a sense of how much you owe—whether you’re working with a tax preparation service like Edge Financial or using tax-filing software.
Fortunately, if you’re in the fortunate situation where you don’t owe the IRS anything, your job is pretty easy! Many taxpayers who aren’t expecting to pay a few thousand dollars on their taxes sometimes pay late simply because they don’t have the money on hand to cover what they owe.
If you were someone who filed your taxes late, or ran into troubles with covering your tax obligation this year, you probably would prefer to avoid this situation in the future. We don’t blame you. Here are a few quick ways to do just that.
If you’re facing an unexpected tax bill, as many people did under the new tax laws that went into effect this year, the first and best way to ensure you don’t run into the same trouble next year is to adjust your withholding.
You can do this at any point, and while it may result in a slightly smaller paycheck, it’s probably an easier adjustment to make than it is to save $1,500 with one month to pay.
Of course, we need to mention again that tax extensions do not give you more time to pay. But for those who have dealt with personal events or just a lack of free time to buckle down and file by Tax Day, giving yourself an extra six months to file can be a welcome life preserver.
Hands down, the best way to avoid missing the tax deadline next year is to file early—and that means booking your time in advance. Take a few minutes now to set a few reminders for yourself starting at the end of next January.
We’re not saying you have to file in February, but giving yourself an easy, relaxed schedule and breaking down your taxes into smaller tasks like collecting receipts and paperwork, filling out basic info, tackling deductions, or calling a tax prep company will make sure you complete your taxes early and with confidence.
There’s no reason to feel guilty. Life happens, and you aren’t the first or the last person to file your taxes late. But now, we’re going to tell you one more thing: Stop reading! It’s time to jump into action and start making headway on those taxes.
We’ve taught you (almost) everything we can, and we’re always here to help. Give us a call or send us a message. But we believe in you—on Tax Day and every day after!