What To Do About Your October 15th Tax Deadline
- October 1, 2019
- Posted by: BenG-Admin
- Category: Blog, IRS, Taxes
There are many situations where you might require a 2019 tax extension. Luckily, the United States Government and the Internal Revenue Service (IRS) seem to understand that it isn’t always possible to file taxes accurately and completely by April.
That’s why an extension often allows businesses to file taxes by September 15th and individuals to file taxes by the October 15th extension. It should be noted that this is the cutoff date for filing taxes, and should be respected. Here is some information that you need to know about the deadline. You should also remember to add accurate information on your taxes, because incorrect information can lead to even more complications. If you are confused about how to file taxes, you should know that it can be done manually or online.
Ultimately, it’s up to you to make sure that your taxes are handled. You might hire professionals to HELP you handle it, but the U.S. government will want your tax money one way or another. In fact, Americans are pretty good about paying taxes. Americans pay about 86% of their federal taxes, according to The Wall Street Journal. When one considers that the IRS is shrinking, this is a great sign for tax compliance (generally speaking).
Check State Law
There are some situations in which your state might also require an extension application. The October 15th extension deadline refers to federal taxes, but of course, you should always make sure that your state taxes are handled, as well. There is a good chance that you have already handled this, but it should be mentioned just in case. It should be noted that there are some states that don’t require an extension application (such as California). You should do everything that you can to make sure that you handle 2019 tax deadlines as responsibly as possible.
October 15th Is Serious
Unfortunately, there are many of us that are procrastinators. It might be that you have always been a natural procrastinator, or that your procrastinating has grown significantly over the years. Regardless, you should recognize that there are concrete penalties if you choose to file your taxes after October 15th. There is nothing wrong with a tax filing extension, but you should make sure that you understand the severity of the situation.
The government is happy to take your tax money, but they will most certainly penalize those who seem to be delay paying their taxes repeatedly. For those who might not be aware, the penalties can be as much as 25% of the amount due. This might mean millions of dollars for the more affluent, and it might mean thousands of dollars for someone who is a member of the working class. Either way, you should take this date seriously, and as a real deadline.
There are very specific circumstances in which you might be granted more time, but this is typically limited to those serving in the U.S. military. If you are currently living outside the country, the government might understand the delay. Either way, you should treat this deadline as the “final” deadline.
Remember The Unusual
One of the issues with a deadline is that it can often lead to you rushing, which means that you might make more mistakes than usual. One obvious way to make sure that your taxes are filed correctly is to think about anything unusual that happened over the year, and make sure that you add this information before your tax filing extension.
Did you have more business expenses than usual? Does the information you file reflect that? Have you followed your stock investments and tracked their performance to figure out more about your capital gains taxes? Do you own cryptocurrency? These are the kinds of questions you want to address to make sure that your taxes are taken care of once and for all.
If there has been some significant financial events of any kind, you should work to remember these and account for them. Of course, this might be more relevant to an individual who is involved in multiple businesses versus someone who only has one source of income.
The Urge To Misreport
There are situations when those who are honest might still feel tempted to cheat on their taxes, and the truth is that this is honestly never worth it. We all know that taxes help governments operate. If you own a cash business, you might be aware that it is much easier to misreport money earned in order to make it beneficial to you and your family. The IRS estimates that over half of cash businesses intentionally misreport their financials.
At the end of the day, it’s possible to achieve success and still pay your taxes. If you are caught, you may find that you end up paying much more than you could have ever imagined, thanks to penalties, fines, and new legal fees. Even though the IRS is understaffed, you should recognize that what you believe are innocent “changes” actually constitutes tax fraud. It’s simply not worth risking your freedom to keep more money in your bank account.
Offer In Compromise
It’s no secret that the Great Recession affected world economies, but it also led to the IRS changing one important thing about the way it operates: they offer an “IRS Fresh Start Initiative” for those who are having real issues paying their taxes. It should be noted that this in no way means that you don’t have to pay your taxes, but simply that there is some additional relief that you can take advantage of.
One manner in which your life might become a lot easier is through an offer in compromise (OIC). This is definitely something to consider if you owe a substantial amount in taxes, such as over $10,000, for example. The IRS might extend an offer where you can actually settle for much less than the full amount owed. This is certainly advantageous considering that it might restore some peace of mind to you and your family, knowing that the IRS is “off your back”. Of course, you will want to make sure that the offer is a reasonable one.
The IRS does take your income and expenses into account, so it’s not as if they are just throwing a random number out there. If you are having some issues paying down debt, this might be the way to go for you. When it comes to an OIC, your assets and income will also be considered. You must qualify for an OIC.
10 Year Statute Of Limitations
If you are worried about tax debt from ten years ago – there’s great news. You can relax! There is a statute of limitations when it comes to tax debt, and the IRS wipes your debt clean after ten years from the last date of assessment. It’s important to remember that the IRS has ten years to collect unpaid debt, but that doesn’t mean that they can’t come after you for debt owed before ten years ago.
IRS Fresh Start Initiative
One of the great things about the IRS Fresh Start Initiative is that it provides a way for individuals to pay back their taxes in a reasonable fashion. If you owe a significant amount of money to the IRS; they understand that you might not be able to pay it all in a lump sum. The IRS Fresh Start Initiative allows you to pay in installments that make sense for your current financial situation. You might also quality for a tax abatement, which can reduce your overall tax debt as well. You should certainly consider whether this is an option for your situation before your 2019 tax deadline.
If you are all exhausted out of options – there is, luckily, one last resort. You can file for financial hardship. If you can prove that there is simply no way for you to pay down your tax debt in the immediate future, the IRS has the power to suspend collection activity—sometimes indefinitely.