April 18 is right around the corner, so if you haven't filed your 2016 tax return, then you've officially entered procrastination territory.
Here's the good news: It's not too late to get your taxes done – or make arrangements to file them later. But if you delay too long, you could get slapped with a costly failure-to-file penalty. Even if you don't owe money, delaying too long stalls your refund check and may even make you more susceptible to tax refund fraud.
Don't delay. Follow these last-minute tax tips for tax-time stragglers.
[See: Answers to 7 Burning Tax Questions .]
Gather paperwork. Before you start your taxes or meet with your tax professional , compile the necessary paperwork. Depending on your tax situation, those key papers may include your W-2 forms, mortgage interest statement, proof of charitable contributions, investment records and last year's tax returns (these may help jog your memory on last year's tax strategy or provide valuable background information if you're visiting a new tax professional).
9 Tax Mistakes You Should Never Make
Not getting the appropriate paperwork in order can cost tax-time procrastinators in more ways than one, says Juan Montes, enrolled agent with TheTaxProblem.com, a firm with offices in Ceres and San Jose, California. For example, choosing to simply skip a deduction because you don't have the right forms can force you to pay more in taxes than necessary. Showing up to a tax preparer's office twice – because you weren't prepared the first time – will cost you in extra preparation fees, Montes says.
File online. If you have a relatively simple return – or choose not to use a tax preparer – then fire up your computer and file your tax return online. If you made less than $64,000 in adjusted gross income in 2016, head to the Internal Revenue Service's free file system , which offers free online tax software from 12 tax prep companies to eligible filers. If you don't qualify, you can pay to file through a tax-filing software program , such as H&R Block or TurboTax, or the IRS's free fillable forms.
[See: 7 Most-Missed Tax Deductions and Credits .]
Be careful. Don't let your frenzy to file before the April deadline cause you to make errors on your tax return. Tax-time scramblers who are rushing tend to make mistakes, says Eva Rosenberg, a Los Angeles-based enrolled agent, known as the TaxMama. "The main thing that people do wrong is that they leave stuff out, work too quickly and make errors by putting things on the wrong line," she says.
Worse yet, don't let your hurry to find somebody – anybody – to help you file your return lead you to an unsavory character's office. At best, a shady tax preparer might be incompetent. At worst, they could walk away with your refund. Choose a reputable preparer. One designation that identifies extensively trained tax professionals is the enrolled agent, or EA, license. These tax pros can be found through the National Association of Enrolled Agents' database .
File an extension. If you can't get your tax situation squared away before April 18 – say, you're missing key documents or need more time to ensure that your return is done correctly – opt to file an extension . "It's OK to file for the extension right now instead of frantically trying to do it at the last minute," Rosenberg says.
The IRS gives taxpayers who file an extension another six months to prepare their return, kicking their due date back to mid-October. While an extension will buy you time to get your tax return submitted and avoid any failure-to-file penalties, it doesn't let you off the hook with your tax bill. You'll need to estimate your bill – as accurately as possible – and pay that amount before April 18. Neglecting to pay your estimated bill on time can land you with a monthly failure-to-pay penalty of 0.5 percent (capped at 25 percent of your unpaid balance).
[See: How to Reduce Your Tax Bill by Saving for Retirement .]
Don't fear your bill. Don't let your nervousness about a large tax bill be what motivates you to procrastinate on your taxes. There is a range of options for filers who can't pay their tax bill immediately, including installment plans for filers who owe less than $50,000. To set up a plan, there is a fee, which ranges from $31 to $225, depending on your payment method, and interest. "We work with people all the time in setting up payment plans," says Janet M. Sienicki, an enrolled agent, accredited business advisor and president of the Indiana Society of Enrolled Agents.
Paying with a credit card or loan are other options, although they'll most likely cost you more in interest.
Get started on the next one. Quit the cycle of slacking. If you've filed an extension, put a note on your calendar to block out some time to work on your return long before mid-October. And if you manage to get your taxes filed, make an effort to not let them linger so late next year. Hold on to any tax documents that come in during the interim and make sure to get in early with your tax preparer.
25 Ways to Fix Your Finances Fast
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