Penalties for late filing of tax returns can be harsh, but what can you do if you haven’t received the information you need from your employer or others? If you are waiting for your Form W-2, mortgage interest statement, 1099 DIV or other documents that are necessary to complete your tax forms, it’s in your best interest to take action. IRS does not accept “failure to receive documents” as an excuse for failure to file.
If you didn’t receive your W-2 form by Jan. 31, contact your employer. If it’s still not in your hands by Feb. 16, you can turn to Uncle Sam for assistance. The IRS will be standing by to assist you at 800-829-1040 on that date and beyond. Before you make the call, be sure you have the following information at the ready: your Social Security number, dates of employment and your employer’s name, address and phone number. IRS will not only contact your employer, but it will also send you a Form 4852 (a substitute Form W-2) to fill out in case you don’t receive the Form W-2 in time to make the tax deadline.
In the old days, when the necessary tax documents didn’t arrive there was no choice but to call your financial institution and spend what seemed like an eternity waiting on hold to speak to a customer service representative about retrieving the missing document. The Internet has changed all that by allowing banks and mortgage lenders to post this information online. After you’ve established an online user name and password, most banks and mortgage lenders make the tax information you need available to you on their websites. Even if you accidentally tossed out some important tax documents along with the junk mail, you can easily access the numbers you need for your tax return.
If you find you just can’t get the documentation together in time, another option is filing an extension. This will delay your filing deadline until Oct. 17, 2011. With the penalty for not filing a tax return or an extension a stiff five percent per month up to a maximum of 25 percent of the amount of tax due on the late-filed return, filing an extension is well worth the effort. Keep in mind that you’ll also need to file an extension for your state tax return.
Please note: taxpayers should not confuse the extra six months the extension provides for filing with a postponement on paying. You’ll still need to estimate the taxes you may owe and submit that amount prior to April 18, 2011 along with Form 4868. To avoid paying a penalty, you must pay at least 90 percent of what you estimate you owe, or 100 percent of your 2009 tax liability. If you don’t pay in full, you’ll wind up owing four percent annual interest on the liability not covered.
Filing a tax return can be daunting and stressful without the advice and guidance of a tax expert. A convenient, searchable directory of enrolled agents, the only federally-licensed tax practitioners, may be found at www.naea.org.
The National Association of Enrolled Agents (NAEA) is a non-profit membership organization composed of tax specialists licensed by the US Department of the Treasury.