What Should You Do if You Haven’t Filed Your Taxes or an Extension Yet?

Talking to a few friends back around tax day (April 15th), their tax filing status on tax day was a mix of the usual responses.

Some had filed early, especially those who were expecting a refund, some waited till the 15th since they knew they owed taxes, and some filed for an extension and estimated what they would owe the Government.

One person I talked with, a co-worker, had not filed an extension or his taxes by the 15th. He said he thought he would be getting a small refund, but he felt it could go either way- he might get a $100 or so back, or he might end up owing $100-$200. He had done a rough estimate, but had not fully run the numbers yet, and said he “ran out of time”. He asked me if he could still file an extension, and I told him that honestly I did not know.

I looked it up on the IRS website a little later, and at first, was a little surprised to see that you cannot file an extension after April 15th, but after I though about it a minute or so, realized that in fact, it did make sense.

Since an extension is only an extension to file your taxes, and not pay an extension to pay any taxes you may owe, filing an extension does not do anything to mitigate penalties and interest you may owe. The fact that you do or do not file an extension does not change the amount you will owe in penalty and interest when you do actually file your tax return if you owe the government more money that you’ve already paid in taxes.

In order to minimize any penalties if you owe taxes, you should file your return as soon as possible if you have missed the April 15th deadline for filing and also did not file an extension. In fact, even if you did file an extension but still end up owing taxes, you should also file as soon as possible to reduce the amount of penalties and interest you will end up owing.

Since the late filing penalties and interest you will owe if you file late is based on the amount of taxes you owe, it is also unclear to many if you are required to file taxes by April 15th (or at all) if you are due a refund.

Are you required to file an extension if you are due a refund?

Of course, there is really no good reason not to file your taxes if Uncle Sam owes you money- its your money, after all.

According to the IRS, you are required to file taxes if you exceed certain income limits- For 2009, it is $9,350 if filing single (and under 65), and $18,700 if married filing jointly (and both spouses are under 65). There are other situations which may affect whether you do or don’t have to file- you can refer to Tables 1-1, 1-2, and 1-3 in IRS publication 17, Your Federal Income Tax, for more information.

Since you are required by the IRS to file a return, even if you are due a refund, you should still go ahead and file as soon as you can- you’ll get your money back quicker.