Time waits for no one, especially the tax season.
With the year ending soon, another tax season is on the way. If you’re stuck trying to figure out what the next steps are for the missed 2018 tax deadline, keep reading.
Can you still e-file your 2018 tax return?
Although April 15, 2019, was the original tax deadline, you can still e-file your tax return until October 15, 2019. After this date, you will be required to paper-file your tax return. This means that you must to print, sign, and mail your tax return to the IRS and your state department of revenue.
That being said, it will take six to eight weeks for the IRS to process your tax return from when they receive it.
If you’re receiving a tax refund:
You have until April 15, 2022, to claim your 2018 tax refund. Due to the IRS statute of limitations, you have three years within the original tax deadline to claim your prior year refund.
For example, you can no longer claim your 2015 refund because April 15, 2019, has passed. The original deadline was April 15, 2016, which has already reached the three-year limitation.
If you have a tax due:
There are no unspoken rules when it comes to taxes. Unfortunately, if you didn’t file an extension, pay your taxes to the IRS by April 15, 2019 (with or without an extension) or file on time, you will be subject to penalties for a failure to file and failure to pay.
Regardless, filing an extension does not mean you have an extra six months to pay the IRS. With an extension, you must estimate and pay 90% of the taxes you may owe to the IRS to fulfill your tax obligations.
Otherwise, you can be subject to the penalty for underpayment of estimated tax.
What are the penalties?
Penalties tacked on to your unpaid tax can accumulate fast. Here’s how they’re calculated for the missed 2018 tax deadline.
- Failure to file: 5% of the unpaid tax per month up to 5 months
- Failure to pay: 0.5% of unpaid tax per month or 0.25% during approved installment agreement (if the return was filed on time, and the taxpayer is an individual) up to 25% or 1% per month after 10 days after the IRS issues a notice to levy
- Combined penalties: The late payment penalty keeps building up to 47.5% of the unpaid tax
- Interest: The federal short-term rate plus 3%
On top of that, if you file more than 60 days after the return due date; extension or not, there is a minimum filing penalty. It is the lesser of either 100% of the unpaid tax or $210 (the minimum filing penalty). The dollar amount is adjusted annually due to inflation.
To find out more about how the IRS assesses penalties, click here.
Arrange an IRS payment plan
If you can’t afford to pay your tax liability right away, you can request an IRS installment agreement (Form 9465) using our services. The IRS will determine if you are able to use the plan to pay off your tax due monthly.
Here are some of the guidelines to meet to guarantee the IRS should grant your installment request.
- You don’t owe more than $10,000
- You agree to pay your tax within three years
- During five years, you filed on time and paid all of your taxes without a payment plan
To get ahead of the game, calculate your tax due to the IRS by 72 (72 months) to get your monthly minimum payment. If you can afford to pay your tax due, it would be in your best interest to request a payment plan.
How to file
Nowadays everything is done electronically, even your taxes. Instead of visiting a tax accountant, you can file directly online. As you enter your tax information, the website calculates your refund or tax due.
All you need to do is:
- Create an account for your tax year
- Enter your tax information such as your name, address, filing status, income, deductions, etc. (We’ll even let you know what credits you qualify for!)
- Submit your account to us
With other tax service websites, you may find yourself paying extra to speak with a live representative. If you have any questions, you can give us a phone call for free.
Fortunately, you can also arrange a phone consultation on your time with a tax expert if you need extra help. Don’t wait until the last minute, especially for the missed 2018 tax deadline.
Get ahead of the game.
If you’ve successfully completed all of your tax years, find out what you have in store for next year by clicking here.