![]() If you plan to do this, the deadline to do so is still April 17 an extension doesn’t buy you any extra time to make this tax-saving move. ![]() One more thing: You can cut your tax bill by as much as $2,750 (for married couples filing jointly) by making a last-minute contribution to an IRA, which lowers your taxable income. Then, subtract this year’s withholdings and estimated payments you made over the course of the year, and send the difference to the IRS this year. If your income is above that, multiply what you paid last year by 1.1 (to get to 110%). If you’re married filing jointly and your adjusted gross income is less than $150,000, just make sure that this year’s withholdings plus payments equal the same as last year. Go back and look at what you paid in taxes last year, including both withholdings and any payments you made (including estimated quarterly payments as well as payments you made last April). If you are unsure how much you owe in taxes, here’s some math to figure out what to pay now. “As long as you pay 100% of your 2016 tax liability - 110% for higher income taxpayers - you will not owe a penalty on your 2017 return,” Jaeger said. So even if you owe more than you can pay right now, file your return and contact the IRS to set up a payment plan. The failure-to-file penalty can be as much as 25% of taxes due. This penalty is larger than for not paying any balance due,” advised Gil Charney, director at The Tax Institute at H&R Block. “They should still file their return to avoid a penalty for failing to file. Tax experts say you should not avoid filing your taxes is because you don't have the money to pay. Freelancers or other gig-economy workers still waiting on a 1099 could be in the same boat. They’ll need to wait because they don’t have the information necessary to compute their tax obligation. Mark Jaeger, director of tax development at TaxAct, said that some taxpayers are shareholders or partners in a business and are still waiting to receive their Schedule K-1 form. Tax pros say there are many legitimate reasons why you might want to file an extension. (Of course, Greene-Lewis pointed out that if you're using a tax-prep service like TurboTax, the program will do this for you.) Check your state tax department's website: While some states will automatically apply your federal extension, others require you to submit a separate state extension form. ![]() Don't forget about state taxes, advised Lisa Greene-Lewis, tax expert for TurboTax. ![]()
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