Last Minute Tax Day Advice from Financial Expert John Fawaz

6 Things to Know

Next Monday is April 15 tax day. It is estimated that 20% to 25% wait to the last second. So 1 in 4 will be waiting until tax day.

1. What if you don’t file your return by April 15: There is a 5% filing penalty if you don’t. If you are not ready you can ask for an extension. The IRS will give you an extension for 6 month or until Oct 15th.

2. IRS will work with you. One of the misconceptions out there is IRS is very hard to work with and wants to garnish all your assets or income that is not the case. They can set up a payment plan up to 3 years and sometimes more. They charge 3% upfront on balance and interest 0.5% a month on balance roughly 6% a year. The key is to call them doing nothing is the worst thing you can do. If you are not on payment plan the interest they charge and penalty is much higher.

3. If you owe nothing do you still need to file your taxes? Yes you do. You need to file whether you owe IRS or not. What if you are due a refund you are not aware off you would leave money on the table. Also you want the clock start on the Audit. The IRS has three years from the day you file your return to audit you.

4. I know it is crunch time one day left anything people can do last second to reduce taxes? Yes you can still do an IRA for last year $5500 or $6500 if over age 50 or a SEP IRA if self-employed 20% of net income of $55,000. By putting money in an IRA you save taxes and it could lower your overall tax bracket.

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