With the deadline of April 18th approaching, many are rushing to complete tax returns and make payments before due date. Trying to have our tax returns completed at such a fast pace can lead us to filing errors. Errors on tax returns will take the Internal Revenue Service a longer time to process. This of course means a delay on your tax refund. You can avoid simple filing errors by electronically transmitting your return as this is the most accurate way to complete your tax return. The April 18th deadline is not only for filing your tax return but also to pay taxes that you owe for this tax year. By law, the IRS will assess penalties to taxpayers who do not file their tax return and pay taxes owed by the deadline. For taxpayers who cannot meet the deadline must request a filing extension to prevent late filing penalties.
Helpful tips to avoid common tax filing errors
- Filing your tax return electronically will reduce tax return errors. The tax software automatically does calculations, flags errors and prompts taxpayers for missing information.
- If you choose to paper file make sure you are sending to the correct address to avoid processing delays.
- As you enter personal information on your tax return take your time to enter accurately.
- Whether you are paper or electronic filing your tax return make sure to review all figures you entered.
- If you are requesting direct deposit, make sure you are entering your routing and account number correctly. Entering incorrect numbers can cause a longer delay or your refund can be deposited in the wrong account.
- Do not forget to sign and date your tax return. If filing a joint return with your spouse you both must sign and date the return.
- For individuals paper filing you must attach your W-2s and all forms that reflect tax withholdings.
- Make sure that you keep a copy of your tax return as well as copies of documents you sent with your return.
Penalties for late filing and late payment
- The IRS will impose a failure to file penalty for taxpayers who do not file by the tax deadline which is April 18th. A similar penalty will apply to taxpayers who do not pay all taxes owed by the filing deadline.
- The penalty for filing late is usually the more expensive of the two. This penalty is normally 5 percent of the unpaid taxes for each month or partial month return is late. The penalty starts accruing a day after the tax filing deadline and will never exceed 25 percent of taxes you have unpaid.
- Penalty for not paying by deadline applies for each month or partial month after due date and accrues the day after deadline. Your penalty will be 1/2 of 1 percent of unpaid taxes if not paid by deadline.
- The remaining taxes owed must be paid by the extended due date. A penalty may become void if an extension to file was requested on time and at least 90 percent of taxes owed were paid.
- The maximum penalty is 5 percent, if you received both the failure to file and failure to pay penalty.
- The minimum penalty is the smaller of $135 or 100 percent of the unpaid tax. This penalty comes when a tax return is filed more than 60 days after deadline or extended due date.
- Penalties may not have to be paid if reasonable cause is shown for not filing or paying taxes on time