Taxes: It’s crunch time for filers
“If you haven’t filed your 2016 tax return, then you’ve officially entered procrastination territory,” said Susannah Snider in USNews.com. Don’t delay. Miss the April 18 deadline and “you could get slapped with a costly failure-to-file penalty,” depending on how much you owe in taxes. If you need more time, you can always file for an extension, which gives you another six months to submit your return. But while an extension buys more time, “it doesn’t let you off the hook with your tax bill.” Taxpayers are still required to estimate their bill as accurately as possible and pay that amount before April 18. If you can’t pay your bill immediately, you still need to file. The IRS offers installment plans for taxpayers 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.”
Be wary of last-minute tax scams, said Kelly Phillips Erb in Forbes.com. Fraud peaks during the final month of the tax season, with scammers looking to take advantage of the last-minute rush. In one scam, “taxpayers are receiving emails allegedly from their tax software provider or others asking them to update online accounts.” These so-called phishing scams usually involve taxpayers handing over sensitive data such as passwords, Social Security numbers, and bank account or credit card numbers. “If you receive a suspicious email purporting to be from a tax software provider or from the IRS, the IRS encourages you to forward it to email@example.com.” And remember, the IRS will never call you to demand immediate payment, or call about taxes owed, without mailing several bills first. Nor will the agency ask you for financial information over the phone or in an email.
Don’t throw out those tax records after you’ve filed, said Kimberly Lankford in Kiplinger.com. “It’s a good idea to hang on to your tax returns indefinitely, but you can generally toss supporting tax records three years after the tax-filing deadline, which is the time the IRS generally has to initiate an audit.” If you’re lucky enough to have a refund coming your way, be sure to put it to good use, said Ann Carrns in The New York Times. The average refund last year was nearly $2,900, more than enough to start a fund to cover emergencies like unexpected medical bills or home repairs. Opting for direct deposit before you see a big check can help make sure you save at least some of that refund. File Form 88 88 with your tax return and you can ask for that refund to be automatically divided between several accounts—“say, half to a savings account and half to your checking account.”