So… Tax Day is almost here! * Pulls hair out. * If that wasn’t enough on it’s own, a new tax bill was passed at the end of 2017, effectively confusing everyone.
Lawline has three new courses that are designed to help us all better understand the effects of the Tax Cuts and Jobs Act of 2017 - for individuals, corporations, and even non-profit organizations. In the meantime, here are three things to remember this Tax Day:
- April 15 is not actually Tax Day this year. In 2018, taxes aren't due until Tuesday, April 17. That’s the actual deadline for submitting individual tax returns to the federal government, making first quarter 2018 estimated tax payments (for freelancers or those who are self-employed), and to make a contribution to a Roth IRA, or a traditional IRA. Why, you ask? So glad you did! According to Business Insider, this year’s delay is because April 15 falls on a Sunday, and because DC’s Emancipation Day is on Monday, April 16.
- Depending on your income, you actually can file your taxes for free. If your adjusted gross income in 2017 was under $66,000, you can utilize the resources at IRS Free File and file them for no charge. Who knew!? (Clearly, not us).
- There are very different consequences for failing to file your taxes on time. Here’s the breakdown:
- If you owe taxes:
- You'll be subject to the failure-to-file penalty if you don’t file by April 17, which is 5% of your unpaid tax bill for every single month your tax bill remains unpaid following the deadline. This insanity can continue until a maximum 25% penalty is reached. Don’t be that guy!
- If you’re entitled to a refund:
- Actually, you’ve kind of got plenty of time. The government isn’t going to fine you for not taking your money back (phew!) In fact, to collect this year’s refund, you need to file by April 18, 2021 - or even later if you filed for an extension. For real - who knew?
You should probably note that after many reminders to file, the IRS may choose to file a substitute return on your behalf - likely not catching each and every deduction/credit you could claim. Furthermore, repeated failure to file can result in additional penalties and criminal prosecution. Sometimes, the IRS might even pay you a personal visit (yikes!).
Let’s just say it’s best to file on time. From all of us here at Lawline, good luck this tax season!