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6. File and pay on time
If you can’t finish your return on time, make sure you file Form 4868 by April 15, 2015. Form 4868 gives you a six-month extension of the filing deadline until October 15, 2015. On the form, you need to make a reasonable estimate of your tax liability for 2014 and pay any balance due with your request.


Requesting an extension in a timely manner is especially important if you end up owing tax to the IRS. If you file and pay late, the IRS can slap you with a late-filing penalty of 4.5 percent per month of the tax owed and a late-payment penalty of 0.5 percent a month of the tax due. The maximum late filing penalty is 22.5 percent and the late-payment penalty tops out at 25 percent. By filing Form 4868, you stop the clock running on the costly late-filing penalty.


7. File electronically

Electronic filing works best if you expect a tax refund. Because the IRS processes electronic returns faster than paper ones, you can expect to get your refund three to six weeks earlier. If you have all your documents in order, go ahead and file electronically in January using our Online filing or come into our office. If you have your refund deposited directly into your bank account or IRA, the waiting time is even less.


There are other advantages to e-filing besides a fast refund. The IRS checks your return to make sure that it is complete, which increases your chances of filing an accurate return. Less than one percent of electronic returns have errors, compared with 20 percent of paper returns. The IRS also acknowledges that it received your return, a courtesy you don’t get even if you send your paper return by certified mail. That helps you protect yourself from the interest and penalties that accrue if your paper return gets lost.


If you owe money, you can file electronically and then wait until the federal tax filing deadline to send in a check along with Form 1040-V. You may be able to pay with a credit card or through a direct debit.

  • With a credit card, expect to pay a service charge of as much as 2.5 percent.
  • With direct debit, you may delay the debiting of your bank account until the actual filing deadline.
 
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