Finishing up Your Tax Return
Make sure you've completed it correctly
The due date for 2018 federal tax returns is looming: it falls on April 15, 2019.
The tax deadline will be here before we know it, and it's very important that you either file your tax return or request an automatic extension of time to file by that date.
The financial penalty for failing to file a return is pretty significant: 5 percent a month—per month, not per year—for each month that goes by until the Internal Revenue Service receives your return. The maximum penalty caps out at 25 percent of the taxes you owe.
What If You File but Don't Pay?
The penalty for failing to pay any taxes you might owe is significantly less, 0.5 percent per month of the amount of your tax debt. That's just half of 1 percent. But the IRS also charges interest on the amount you owe. If you simply can't pay by April 15, you have a couple of options.
- File your tax return or ask for an extension by filing Form 4868 with the IRS before the April 15 deadline.
- Pay as much as you can by April 15.
- Consider paying your taxes by or setting up a payment schedule with the IRS to have the money from your checking account.
- Ask the IRS for an installment agreement if you don't think you can pay off your balance within a few months. An installment agreement is a monthly payment plan. You can call their toll-free number at 800-829-1040 or apply at their website online.
Of course, this means completing a rough draft of your tax return, even if you don't file it yet, so you have a rough idea of how much you owe.
If You Need Help
If you enlist someone's help in preparing your tax return and if you want that individual to be able to discuss your tax return with the IRS, you must fill out the "Third Party Designee" section on your tax return. Your tax preparer can then talk to the IRS about any questions or concerns it might have about your return.
You can also use this section to designate a family member, a caregiver, or any other trusted person to deal with the IRS on your behalf, even if they did not help prepare your return.
Third party designations expire one year from the due date of your tax return.
Be Sure to Sign Your Tax Return
You're required to sign your tax return because when you do, it means you're effectively declaring under penalty of perjury that the information it contains is true and accurate. You can't cross out the perjury statement just above the signature line. The IRS will consider your tax return "frivolous" if you do this, and it will assess a $500 civil penalty. Your tax return will not be accepted for processing.
You're must date your tax return as well, and the date must be the day you actually signed it. Giving the IRS your occupation and telephone number is optional.
The Paid Preparer's Section
If the person who helped you with your return was a tax professional and you paid him, he must fill out the section of your return that asks for his identifying information. He must also sign and date your return and provide his Social Security number or Tax ID number.
Friends, relatives, or volunteers don't have to complete this section or provide this information as long as you didn't pay them anything to help you.
Putting Together Your Return
Staple one copy of each of your W-2 statements to the front of your tax return. If you must file other schedules and statements with your return, sort them from lowest to highest using their attachment sequence number. You can find this in the upper right corner of the form.
Now staple everything together and mail it to the correct IRS Service Center. The one you should use will depend on a variety of factors, such as your state of residence and whether you're also submitting a payment. The IRS of Service Centers and guidance on its website.
That's it. You're finished—until next year, at least. If it turned out that you owed the IRS money, consider increasing your income tax withholding to avoid that happening again. You can fill out a new Form W-4 and give it to your employer. Use the worksheet on Form W-4 to calculate a precise and correct new withholding amount.
And keep in mind that you can spare yourself a great deal of aggravation by simply purchasing tax preparation software next year. Most will walk you through your tax situation step by thoughtful step, asking you a series of questions, and they're not particularly expensive. Input your information to the program, and the software will e-file your return for you. It doesn't get any easier than that.