Haven’t filed your 2017 income tax return yet? Beware of these pitfalls

The deadline for federal income tax filing is a little later than usual this year — April 17 — but it’s now almost here. If you have yet to file your individual return, you might want to think about filing an extension. Alternatively, you might be worried about meeting the deadline in the eyes of the IRS. Whatever you do, don’t get tripped up by one of these potential pitfalls.


Filing for an extension

Filing for an extension lets you postpone filing your return until the applicable extension deadline, which is October 15, 2018, for 2017 individual tax returns.

While filing for an extension can bring relief from the stress of the April 17 deadline and avoid failure-to-file penalties, there are some possible drawbacks:

  • If you owe tax, to keep from owing interest and penalties, you still need to (with a few exceptions) pay any tax due by April 17.
  • If you expect a refund, remember that you are extending the amount of time your money is in the government’s pockets. (You won’t be charged a failure-to-file penalty if you’re owed a refund and file late. However, filing for an extension may still be a good idea.)


Meeting the April 17 deadline

If a paper return that’s due April 17 is postmarked by midnight, the IRS will consider it on time. Sounds straightforward, but here’s a potential drawback: for example, you mail your return with a payment on April 17, then the envelope gets lost. You don’t figure this out until a few of months later when you notice that the check still hasn’t cleared. You then refile and send a new check. Despite your efforts to file and pay on time, you could still face both failure-to-file and failure-to-pay penalties.

To avoid the penalties, make sure to use certified or registered mail or use one of the private delivery services designated by the IRS to fulfill the timely filing rule, such as:

  • DHL Express 9:00, Express 10:30, Express 12:00 or Express Envelope,
  • FedEx First Overnight, Priority Overnight, Standard Overnight or 2Day, or
  • UPS Next Day Air Early A.M., Next Day Air, Next Day Air Saver, 2nd Day Air A.M. or 2nd Day Air.

Beware: If your delivery service is unauthorized, your return won’t be “filed” until the IRS has it. See IRS.gov for a complete list of authorized services.


Avoiding interest and penalties

Despite the possible drawbacks, it can be tax-smart to file for an extension if you’re missing the necessary documents or you face unexpected life events that prevent you from dedicating enough time to your return right now. We can help you know if you owe tax and how much you should pay by April 17.  If you need help or have questions about avoiding penalties and interest, contact us.

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Ben R Shull CPA LLC provides clients with tax, transaction, and advisory services. The insights and quality services we deliver help lead our clients through the next generation of changes, and accelerate growth while reducing risk. CPA Katy, TX.