Filing Your Tax Return Late Is Expensive
Filing your tax return late is expensive! Some people are staring down the barrel of the absolute final deadline for 2016 tax returns, just as the 2017 tax filing season opens.
For those in one of the four 2017 Federally declared disaster areas that occurred prior to October 15, 2017, the final deadline to file your 2016 tax return without a late filing penalty is a week away on January 31, 2018.
Missing that deadline and filing your tax return late is expensive. VERY expensive.
The penalty for non-filing is 5% of the tax due PER MONTH until you hit a cap of 25% of the tax due.
Let’s just say that you’re a married couple with normal incomes - let’s call it $125,000 for the year. Your tax bill after deductions is probably about $20,000.
The penalty for missing the January 31, 2018 filing deadline could be $1,000. If you don’t get it in until after March 2, 2018, it’s $2,000. If you don’t get your 2016 return in until after April 2, 2018, the minimum penalty is $135 or 100% of the unpaid tax!
Time to start digging for those documents!
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What you must have:
Every document mailed to you that was reported to the IRS; there is an IRS form number on the document
State issued, CURRENT ID
Information about any deductions
Business income and expense information
Your proof of health care information - the IRS will NOT process your return without health care information and this can cause your return to be considered as late filed
Even if you don’t have everything you need, you should file a return and then plan to amend it as soon as possible. BUT, you MUST include your health insurance information. If you had advance premium tax credits, you should contact the Health Insurance Marketplace to get a copy of your form 1095-A immediately. Either contact the marketplace at healthcare.gov or call 800-318-2596.
Just to be clear, this relates to 2016 returns - the filing season for 2017 returns starts on Monday the 29th.