American tax payers have two extra days to file their returns and we have some tips that will help you with the process. The most important thing is to file, even if you owe money to the Internal Revenue Service, because you can always work out payment arrangements later.
Thank Uncle Sam for the new federal law that turns the District of Columbia’s Emancipation Day holiday that was turned into a nationwide tax extension.
If you need more time to prepare your return, you can file an extension, which will give you until mid-October. To do that, fill out form 4868 and mail it by April 17. However, you will not be able to file an extension if you owe money, according to the IRS’s web site.
If you do owe money, the IRS expects you do pay by the April 17th deadline, with no excuses. If you can’t pay it, get ready for some hefty fines and interest.
Remember, whether you file your full return or an extension, the IRS wants you to pay any money you owe by the Tuesday deadline. (Make your best estimate if filing an extension.) Maybe that’s an incentive to finish your taxes. There’s still a weekend and a couple of days to go!
Do you have capital gains to be reported? Gains on the sale of most assets are reported this year in a different way, on a new sheet called Form 8949. Then the numbers flow to the traditional Schedule D (and from there onto your Form 1040).
If you settled any credit card debt, you still owe taxes on the balance. You will need to consult with a tax planner or you can use TurboTax to figure out what you owe. Just because you settle a debt for less than it’s worth doesn’t mean you don’t pay tax for the balance.
Have you grabbed all the deductions and credits you can? This is a big one and it can save you money. Make sure you include all of the available deductions, from mortgage interest and charitable gifts to college costs and state income taxes.