Bozo Tax Tip #1: Procrastinate!

It’s April 16th. There was a deadline yesterday?

Well, this post was supposed to appear yesterday morning, but apparently I clicked on the 16th rather than the 15th when I wrote it. What a difference a day makes. Yesterday, you could still file an extension and save yourself the Failure to File Penalty (5% of the tax per month late). Today, you can’t.

So what do you do if you can’t file your tax? File an extension. If you wake up today and realize there was a deadline yesterday, well, get your paperwork together so you can file as quickly as possible and avoid even more penalties. Penalties escalate, so unless you want 25% penalties, get everything ready and see your tax professional next week. He’ll have time for you, and you can leisurely complete your return and only pay one week of interest, one month of the Failure to Pay penalty (0.5% of the tax due), and one month of the Failure to File Penalty.

There is a silver lining in all of this. If you are owed a refund and haven’t filed, you will likely receive interest from the IRS. Yes, interest works both ways: The IRS must pay interest on late-filed returns owed refunds. Just one note about that–the interest is taxable.

I hope you enjoyed our Bozo Tax Tips for the 2009 filing season. We’ll be back next week resuming our normal coverage of tax events in the US and California.


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