If you requested an extension on filing your federal income tax return, your due date is just around the corner on October 16th, 2017. You must have your tax return postmarked or electronically submitted by that date. If you don’t file on time, you face the very serious failure-to-file penalty.
Information Needed to File Electronically
The IRS recently released a news release reminding taxpayers of the due date and advising them on new rules on electronic signatures. Unfortunately, if you are filing electronically, you can no longer just generate a PIN (personal identification number) to authenticate your electronic signature. Instead, you need last year’s self-selected PIN and your birthdate. Alternatively, you can use your adjusted gross income (AGI) from your 2015 return. If you are married filing jointly, your spouse also needs that information to sign electronically.
Where to Find Your Adjusted Gross Income
Your adjusted gross income is your gross income minus some adjustments. You can find it on line 37 of Form 1040, line 21 of 1040S, or line 4 of Form 1040EZ. If you don’t have a copy of your 2015 return, you can download a copy from the tax software you used to file. Alternatively, you can order a transcript from the IRS. You can request a transcript by calling the IRS at 1-800-908-9946. Mailing the transcript takes five to ten business days. To get a transcript immediately, use the IRS’s online tool at IRS.gov/transcript. This tool has a multi-step authentication process which requires an email address and a mobile phone number. You also need an account number from a loan in your name so the IRS can double check your identity against your credit report—don’t worry this doesn’t affect your credit score. Once you have the transcript, your adjusted gross income is clearly labeled and easy to find.
What If You Can’t Verify Your Electronic Signature for Your Tax Return
If you don’t have time to get a transcript and can’t find a copy of your return, you may want to mail in your tax return. That way you can just sign it, and you don’t have to worry about verifying an electronic signature.
Filing Extensions for Hurricane Victims
If you filed for an extension and live in a disaster area, you have until January 31, 2018 to file your return. This applies to taxpayers affected by Hurricanes Harvey, Irma, and Maria as well as people in some parts of Michigan and West Virginia. The IRS has more details on the disaster recovery page of its website. If you live in one of the affected areas, you may want to double check if you qualify for an extra extension. As a general rule of thumb, the extra time only applies to individuals in Federally declared disaster areas.
What Happens When You Miss the Extension Deadline
As indicated above, if you miss the October 16, 2017 deadline, you face a failure-to-file penalty. The penalty is 5% of the tax you owe, and the penalty is assessed the day you are late. Additionally, if you didn’t pay at least 90% of your tax due in April, you may owe some failure-to-pay penalties. Moreover, those penalties are only 0.5% to 1% of your balance. The IRS also assesses them monthly. If you don’t have the funds to pay your 2016 taxes owed, you should still file your return. It is a good idea to pay as much as you can. Next, contact the IRS or tax firm set up a payment plan or make other arrangements on your behalf. For assistance with tax issues, call 1-888-349-2116 for a free consultation.