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The weather isn't so cold. Maybe you've awakened to a spring sun shining and birds singing. All is well with your world until a feeling of dread begins to churn your stomach: You suddenly remember you haven't done your federal income-tax return.
Don't panic. Take a deep breath. April 15 is Sunday. And you don't have to file until midnight Tuesday thanks to the Emancipation Day holiday in Washington, D.C.
So, what to do? I have two options for you to consider:
- Do your return. Once you've mailed it in, you're done, assuming you remember to sign the return, double-check the math and, if necessary, include a check.
- File for an extension. That gives you until Oct. 17 to get your return in. But there is a catch: If you owe the Internal Revenue Service money, you need to remember to mail a check in by midnight Tuesday.
Use either option, and don't be cavalier about it. If the IRS can prove willful failure to file, you could be subject to a criminal fine of as much as $25,000, and you could go directly to jail -- without collecting your $200. As slimming as stripes normally look on you, all of a sudden fashion isn't as important as it used to be.
That's in addition to the civil penalty of 5% of the net tax due (that's the tax owed after credit for withholdings, estimated taxes paid and other credits on your return) per month, up to a total of 25%.
If the return is more than 60 days late (without an extension), then the minimum civil penalty is the lesser of $100 or 100% of the tax due on the return. And that's just for not filing. There are additional penalties for not paying.
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So, do you feel like your collar is two sizes too small?
OK, now take another deep breath. MSN Money is behind you. Even the IRS is behind you; they would much rather have you file something by Tuesday than nothing at all.
What to do
Let's look at your options more closely:Get that return done. If you can get your return done and postmarked by midnight Tuesday, you've filed on time, and once more you've escaped the bullet. Sharpen your pencils and get down to work. Find out which post office in your community will be open until midnight. Give yourself time to get there.
Now, get that return out and work the numbers on both the federal and state returns. Be sure to attach your W-2 statements to each when you finish.
If you have children under 17, don't forget the $1,000 child tax credit.
Use our Tax Estimator to get a handle on your bill.
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Look out for hidden tax breaksCongress renewed some tax credits and deductions too late to make the IRS' forms. Here's how to find out what you're entitled to.
This is potentially a tricky year for everyone's tax returns because Congress passed a number of tax breaks after the IRS printed tax forms.
Among the last-minute changes, three are probably the most important:
- Higher-education deduction. If your adjusted gross income didn't exceed $65,000 ($130,000 if you were married and filed jointly), you can deduct as much as $4,000 for payments of qualified tuition and fees.
- Sales taxes. If you live in nine states that have no income tax, you can probably deduct your state and local sales taxes. Those states are: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming plus New Hampshire and Tennessee, which tax only dividend and interest income.
- Telephone excise tax refund. You can probably claim the Telephone Excise Tax Refund, which lets you get back previously-collected taxes on long-distance calls. For more, click here.
For more on last-minute tax changes, see my article "Last-minute reprieve for taxpayers."
Don't forget to sign the returns. If you want to file online with TurboTax, click here. To file online with H&R Block, click here.
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