Why the Tax Filing Deadline Doesn’t Apply to You.
For years it has been the unspoken conventional wisdom to make sure to file your taxes by April 15th every year. There has been a lot of news coverage and hype surrounding this issue of the tax filing deadline. At the height of the hype, news crews are out at the post office on April 15th interviewing filers, focusing on the postmark stamped on the envelopes and all sorts of other hyping madness. So what is it all April 15th filing deadline about? Why the hype about April 15th? Will you miss out on some benefit or face some negative consequence for filing after April 15th? Maybe, and for most “NO”.
The vast majority of people in the U.S. that will file taxes work some sort of job for a living. It just depends on what type of job, from there it moves up in sort of a pyramid shape with the regular employed folks at the base, then the self-employed, small business owners, investors, major business owners, the rich and so on. The higher up, the less people there are in any specific category until you reach the almighty 1%, and they have their tax own issues. Whether you work for a government entity or private company of any kind, it is still working and you will fill out a W4 where you classify your legal status for employment and exemption status. That document is used to determine how much taxes are to be withheld based on you salary level and exemptions you put down. By law, the employer must have you fill out this document, and withhold taxes from your pay/ compensation accordingly if you work full or part time directly for that employer. If you do not work full or part time directly for that employer then they must send you a form 1099 instead at the end of the year, this form will tell you how much the employer reported to the government that they paid to you, with or without taxes. This is typically for contract and task based types of work. Either way, you usually have the chance to elect exemptions and go from there.
At the end of the year and the beginning of the new year, the employer is required by law to send you a form W2 that details all monies paid and taxes withheld, that is the primary document the majority of workers will use to file their taxes. Although the profile of working taxpayers is very broad ranging from single person head of household to married with kids and so on, the majority of regular working people will have paid enough taxes or paid too much, especially once tax credits are added in. That will be the reason for a refund, once you fill in the 1040a or 1040ez whichever works for you, at the end it will let you know if you’ve overpaid by any amount and that will mean a refund is due. Conversely if you’ve underpaid, it’ll state that amount as well and that is what you will owe.
Now about this timeline, unless you are going to need to pay any money you owe you do not have to file by April 15th. This deadline applies to people that owe money and must pay or claim an extension to file or pay so they will not receive and extra penalty fee on top of what they already owe. That’s it. If you know you are not going to owe money because you are one of the millions of regular working class folks that typically get a refund of some sort every year, then the deadline doesn’t apply to you. If you want to you can file your taxes in August, October or whatever month you like, it won’t make a difference if you don’t owe any money. The only thing is you must file be the end of the year, however, even then if you don’t owe any money it may be of no consequence. Except that if you don’t file by the end of the year for the previous year, (by end of 2015 for 2014) the IRS will contact you asking you to file because they’ve received your employer’s info, and if you need your tax returns for anything like loans or something, you won’t have them on hand. It is primarily when you owe money to the IRS that timing is seriously everything.
So unless you’re under some pressure or just plain ol’ anxious to get back any refund due, and truth is most of us see tax refunds as bonus and surplus monies, then you can file at any time during the year. After all of the hype, all of the commercials, the tax prep advertisements and the sales targeted at people getting refunds you can file. You can file and get your refund electronically the same way you would have in the eye of the hype storm. Except now, you might think a little more clearly as to what to do with that bonus surplus, now that you have tax money and the retail feeding season is over.
What’s really crazy, how many people that aren’t aware of this and are swept up into the hype of a tax deadline that doesn’t apply to them. I remember years ago asking everyone at the job about the filing deadline and most had no clue. Once your financial situation becomes a little more complicated by investments, capital gains, real estate rentals, small business profits, inheritances, stock options, 401k loans, disbursements, small business investments, depreciation tables, donations, running charitable organizations and many other things that make taxes complicated, then it’s necessary to be on your game maybe even on a quarterly basis and you’ll definitely know it’s necessary. Until then, if you’re doing the typical work grind like most folk then you’re in pretty good shape and don’t have to let the hype steer your actions.
• You can file your taxes all year long with no penalty if you don’t owe
• You can download tax software and do it yourself all year long, it costs the same
• You can e-file your taxes before, on or after April 15th and get your refund the same way
• Tax preparers push the deadline for business reasons, although it doesn’t apply to most people
• Car dealers and the retail industry market special campaigns for tax season
- It applies of you owe money as a pay by date or extension request deadline
- The deadline does apply if you are going to use a part of the refund for an IRA contribution or top open an IRA
Remember to save a lil’ bit if you can or pay down some crazy interest debt.