No, that’s not the latest lottery jackpot.
Over 12 million taxpayers filed for an extension this year (according to the IRS). And the deadline is quickly approaching. This October 15th may feel more like April 15th as the 6-month extension to file 2012 tax returns ends on Tuesday.
Procrastinators are scrambling to gather their paperwork and head over to their tax preparer’s office to beat the deadline. If you’re one of the 12 million, here is a quick list of the forms you need to locate before preparing your return.
- Social Security numbers – yours, your spouses and your dependents
- Tax ID number of your child care provider
- W-2 from your employer – you should have this by January 31
- Form 1099-MISC – if you worked as a contractor
- Form 1099-INT – for interest earned on most savings accounts
- Form 1099-DIV - for each stock, mutual fund or money market account. (If you used a broker, the broker transactions will be sent on Form 1099-B.)
- Form 1098 – mortgage interest paid for each home you own
- Receipts for any state and local income taxes paid (such as your home, car, boat, etc.)
- Receipts for any charitable donation
- Mileage you traveled for volunteer work - you can’t claim your time, but you can deduct your mileage. (Use your calendar as documentation, mark the mileage driven on the days you volunteered.)
Don’t be in such a hurry that you rush through the process and miss credits and deductions. It is so important to double check your tax return. Liberty Tax Service has a double-check process in place if you use them to file.
A common misconception for filing the extension is to delay payment. But this is not the case – if you owe taxes your payment deadline was April 15. Late payment penalties and interest are assessed when you do not send the IRS your tax obligation by the tax deadline. The late payment penalty is usually 0.5% of your unpaid taxes, with the maximum at 25%.
The IRS will also assess a late filing penalty of 5% of the unpaid taxes not paid by the due date for each month your taxes are late, with a maximum also at 25%. If your payment is more than 60 days past due, the minimum late filing penalty is $135 or the balance of the taxes you owe, whichever is less. On a more serious note, willful failure or fraudulent failure to pay taxes or file a return have higher penalties (including possible jail time).
You have a number of options available to pay your tax liability (that is, if you owe). Those that can pay their tax liability in full can do so by debit or credit card, electronic funds transfer or check or money order. Or taxpayers can ask the IRS for permission to make monthly installment payments by attaching Form 9465, Installment Agreement Request to their tax return. Another option for payments is to have the funds directly debited from a bank account. A Liberty Tax consultant can assist you with these options.
And many people still have time to file. The IRS has allowed more time for some people, including members of the military and others serving in Iraq, Afghanistan or other combat zones (to identify these zones visit http://www.irs.gov/newsroom/article/0,,id=108331,00.html). Also people living in parts of Colorado’s designated disaster areas have until December 2, 2013 to file and pay.
To find a local Liberty Tax Service office, call 1-866-871-1040 or click here.
Disclaimer: Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.