The Internal Revenue Service is all about numbers, and that includes dates on calendars. If you don’t file your return on time and if you owe tax, you’ll face penalties and interest.
Everyone knows about April 15, the day tax returns are due. But as countless procrastinators can attest, it’s when your return must be en route to the IRS, not when the agency actually has to have your 1040 in hand.
The IRS considers a paper return filed on time if it is mailed in a properly addressed envelope, has enough postage and is postmarked by the due date. The official term, per Section 7502 of the Internal Revenue Code, is “timely filed.” The tax code also notes that the date on a U.S. Postal Service receipt for certified or registered mail also qualifies.
As long as the tax mailing has the appropriate USPS cancellations showing it was mailed on or before the due date, the return is considered on time no matter when the IRS actually receives it.
Private delivery accepted
What if you’re more comfortable using a private delivery service? That’s OK with the IRS and has been since 1997.
In these cases, the IRS considers a timely filed postmark to be the date a private delivery service records in its database that it accepted the tax document or marks that date on the mailing label.
The IRS has designated three companies as authorized private delivery services: DHL Express, Federal Express and United Parcel Service. If you choose to use one of them, check with its local office as to the company’s requirements and pick-up deadlines, as well as the specific private delivery services the IRS accepts.
Filing on time electronically
Electronic filing is popular in part because it enables you to send your 1040 from a personal computer with a simple push of the “Enter” button.
E-filing also provides an almost immediate acknowledgment that the return is on its way to Uncle Sam. This notification from tax software companies and other electronic return originators is your official electronic postmark.
Technically, an e-filed return is not considered filed until the IRS acknowledges that it has been received and accepted for processing. However, if the electronic transmission is successful and completed on or shortly before the due date, the IRS considers it as timely filed.
But don’t wait until 11:59 p.m. April 15 to e-file. Although such a last-minute electronic timestamp is acceptable to the IRS, you run the risk that your online connection might be bogged down by other late e-filers. Worse, your computer could crash, not only causing you to miss the filing deadline but also destroying your entire return.
Pushing the deadline
Sometimes April 15 comes and goes without any tax consequence. That’s the case when it falls on a weekend or federal holiday. In these instances, the next business day becomes the official tax-filing deadline.
The IRS also allows you, if you file the proper paperwork, six more months to complete your Form 1040. Submit Form 4868 by the regular April due date, and your filing deadline becomes Oct. 15, or if that date falls on a weekend or federal holiday, the next business day.
Although an extension can be a welcome tax respite, keep in mind that it only gives you more time to file your return. It is not an extension of time to pay any tax you owe. Failure to pay will cause penalty and interest assessments to start accumulating.
- Mail in the paper form, which can be downloaded from www.IRS.gov.
- File it electronically. The form is included in most tax software packages, or eligible taxpayers can find it at the IRS’ Free File site. Go to www.IRS.gov and type “Free File” in the search box at the top of the page.
- Pay part or all of your tax bill by credit card via an authorized, private-sector service provider.
The IRS has authorized two companies to process credit cards payments:
- Link2Gov Corporation
- Official Payments Corporation
Both companies charge a convenience fee of 2.5 percent of the payment amount. And if you do not pay your full tax due, penalties and interest will accrue on the unpaid balance.
More filing deadlines for some
April 15, or the following business day if the 15th falls on a weekend or federal holiday, is a double deadline for some taxpayers. The mid-April date also is the due date for the year’s first estimated tax payment.
U.S. taxes are collected on a pay-as-you-earn system, with the bulk of them paid by payroll withholding from employee wages. But when you are self-employed or have income, such as investment earnings from which no taxes are withheld, you must make the payments yourself as estimated payments. If you do not pay enough throughout the year, either via withholding, estimated payments or a combination of both, you could face an underpayment penalty.
To avoid this, Form 1040-ES, which includes instructions and payment vouchers, helps you calculate your untaxed income and figure your bill. The IRS prefers you take that total estimated amount, divide it by four, and send in equal payments on April 15, June 15, Sept. 15 and Jan. 15 of the following year. Again, holidays or weekends will push these deadlines to the next business day.
You can make each payment by sending the appropriate paper 1040-ES voucher, downloadable from www.IRS.gov; paying by credit card; having the funds electronically withdrawn from your bank account; or paying via the IRS’s Electronic Federal Payment System, or EFTPS, at www.EFTPS.gov.
Figure your estimated payments carefully because underpayment penalties also are assessed on each payment period if too little is remitted. If your income that is not subject to withholding is unequal throughout the year, you can avoid such penalties by using the annualized method. Using Form 2210, figure each 1040-ES payment period separately and pay the appropriate tax for each. This is particularly useful if your job is one where you earn most of your income in one period, such as a lawn service with key earnings during the summer, because you then will have the cash to pay the taxes.
For more tax-filing information and tips, check out Bankrate’s Tax Guide