Last Call for Extensions: Tax Filing Deadline Looms
Next Tuesday marks a crucial deadline for those with a tax extension for the 2024 tax season. As no further extensions are available, timely action is key. For those hindered by certain challenges, swift filing remains paramount. Gordon Law Partner tax attorney and CPA, Andrew Gordon, spoke to Brad Smith on Wealth! about navigating this timeline.
The Importance of Timely Filing
Filing taxes promptly is essential, even if you’re unsure of the precise amount owed. According to Mr Gordon, "If you don’t know how much you owe because you don’t have a tax document, you haven’t completed your bookkeeping, it still makes sense to file with an estimate". Failing to file could incur substantial penalties, making early estimation and amendment afterwards a prudent approach.
When Payment is a Challenge
If meeting the tax bill is daunting, fear not. Mr Gordon advises, "If you can’t pay, it still makes sense to file as soon as you can". The IRS is generally accommodating, offering payment plans to ease the burden. Therefore, lacking funds should not deter one from adhering to the filing deadline. Filing on time may significantly reduce penalty fees.
Understanding the Penalties
The cost of not filing taxes far outweighs merely failing to pay. As Mr Gordon highlights, "The penalty for failing to file is ten times the penalty of failing to pay". Specifically, failure to file attracts a steep 5% monthly penalty post-deadline. Filing promptly, even if slightly late, can stave off escalating fees.
| Type of Penalty | Description |
|---|---|
| Failure to File | 5% per month |
| Failure to Pay | Significant but lower than failure to file |
Planning Ahead: A Glimpse Into 2025
To sidestep such ordeals in the future, strategic planning is advisable. For the 2025 tax season, Mr Gordon suggests paying quarterly estimates to avoid falling behind. This foresight manages both potential penalties and cash flow. By assessing prior or expected taxes owed, one can maintain easy finances during tax time.
Additional Resources
For further insights into market trends and tax strategies, explore additional expert analysis here. Whether preparing for the current filing or planning ahead, being informed is the cornerstone of financial health.
This post was penned by Naomi Buchanan.
