Every month, individuals and business owners are submitting information forms or making tax deposits or both to the Internal Revenue Service.
Imagine if this person-specific avalanche of data and funds were coming at you. Can you imagine the highly organized system you would need to keep up with it? No wonder the IRS puts due dates on everything.
Most taxpayers know that April 15th is tax due date, the day that your annual tax return or extension request with any underpaid taxes are due. Likewise, most investors and small business owners know the four estimated tax payment due dates for the year. Besides these direct obligations to the IRS, there are other equally important due dates, like the deadline for funding your retirement account (e.g. IRA, Roth, SEP-IRA and Simple-IRA). Don’t miss these due dates — it’s costly.
If you have ever been late on filing your income tax return (without properly extending it) or late in paying your taxes, you have first-hand knowledge of what the IRS can and will do to you. They don’t send the IRS police to your house. Instead, they hit you in the pocketbook where it can really hurt. And they do this with the law on their side.
For 2018, the following are the most popular due dates for individuals and the small business owners.
INDIVIDUAL TAX RETURN DUE DATES
• April 17, 2018 – Form 1040, 1040A or 1040EZ, or 4868 Extension with any tax due
• October 15, 2018 (extended due date) – Form 1040 or 1040A
BUSINESS TAX RETURN DUE DATES
• March 15, 2018 – S Corporation (Form 1120S), Partnership (Form 1065), Extension (Form 7004)
• April 17, 2018 – C Corporation (Form 1120) or Extension (Form 7004)
• September 17, 2018 (extended due date) –S Corporation (Form 1120S), Partnership (Form 1065)
• October 15, 2018 (extended due date) – C Corporation (Form 1120)
ESTIMATED TAX PAYMENT DUE DATES
• April 17, 2018 – 1st estimated tax payment for 2018
• June 15, 2018 – 2nd estimated tax payment for 2018
• September 17, 2018 – 3rd estimated tax payment for 2018
• January 15, 2019 – 4th estimated tax payment for 2018
PAYROLL TAX DEPOSITS DUE DATES
• Monthly depositors: 15th day of the month following the payroll month; or,
• Semi-weekly depositors: Wednesday following the paydays of Wednesday, Thursday or Friday, and Friday following the paydays of Saturday, Sunday, Monday or Tuesday.
CONSEQUENCES FOR LATE FILING OR LATE PAYING
The IRS, by law, has the power to assess penalties to you for (i) failing to file a tax return, and, (ii) failing to pay taxes you owe by the deadlines. In IRS Tax Tip 2013-58, April 18, 2013, the IRS summarizes important points and the costs for not meeting the deadlines. Here are some of their points.
- A failure-to-file penalty may be assessed if you do not file your tax return by the due date.
- A failure-to-pay penalty may be assessed if you do not pay all your taxes by the due date.
- The failure-to-file penalty is generally more than the failure-to-pay penalty.
- The failure-to-file penalty for late filing is normally five percent of the unpaid taxes for each month or part of a month that your tax return is late. Penalty starts accruing the day after the due date.
- The failure-to-pay penalty is . of one percent of your unpaid taxes. The penalty starts accruing the day after the due date and applies for each month or part of a month after the due date.
- If both penalties (failure-to-file and failure-to-pay) apply in any month, the maximum penalty that you will pay for both is five percent.
- Interest accrues on any unpaid tax from the due date of the return until the date of payment in full. The interest rate is determined quarterly and is the federal short-term rate plus three percent. Interest compounds daily.