There are three 2017 tax deadlines that are important to know: the regular tax deadline, the extended deadline, and the deadline to file an amended tax return. Here's where all three of these dates land for your 2016 tax return, and what they mean to you.
Note: These are the deadlines for your 2016 tax return, which you'll file during the 2017 calendar year.
Tax Day 2017
The regular tax deadline in 2017 is April 18, 2017. Taxpayers must either file a 2016 federal income tax return by this date or file a six-month automatic extension request by this date.
In most years, Tax Day is April 15, a date that is well known by many people. However, April 15, 2017, falls on a Saturday, and Monday, April 17, is the date of observance for a Washington, D.C., holiday known as Emancipation Day. So the tax deadline is the next day after that -- April 18.
On the other side of things, you can file your 2016 tax return as early as Jan. 1, although the IRS will not begin to accept e-filed returns until Jan. 23. It's generally a good idea to file as early as is practical, as early filing not only can result in a speedier refund, but is also one of the best safeguards against fraudulent tax returns being filed in your name.
The extended tax deadline, and what it means to you
The extended tax deadline in 2017 is Oct. 16, 2017, for those taxpayers who filed an extension by the original deadline.
It's important to mention that the extended tax deadline refers to the last day to submit your 2016 federal tax return -- not the last day to pay any tax you owe. Any tax you owe must be paid by the original tax deadline, regardless of whether you requested an extension or not.
If you don't pay the tax you owe by the April tax deadline, you can be charged interest and penalties retroactive to April until the balance is paid, so it's important to be aware of this distinction before you file an extension. Penalties will generally be waived if you paid at least 90% of your tax with the return, so do your best to estimate the amount of tax you'll owe, and pay it along with your extension request in April.
The deadline for an amended 2016 tax return
Technically, you can file an amended return at any time, but you only have three years from the original tax deadline to claim a refund. For 2016 tax returns, this due date is April 15, 2020. Similarly, there is technically no deadline for a previous year's tax return, but after three years, your refund becomes property of the IRS.
Penalties for missing these deadlines
If you are entitled to a tax refund, there is no penalty for missing these deadlines. Not surprisingly, the IRS is perfectly content to keep your money for as long as you'll let them. However, if you owe taxes, the penalties for missing these deadlines can add up quickly.
If you fail to pay your taxes by the April due date, you can be assessed a penalty of 0.5% of the outstanding balance for each month (or part of a month) you're late, up to a maximum of 25%, plus you'll pay interest on the balance. Currently the IRS's interest rate for underpayments is 4% per year. For example, if you owe $5,000 and pay a year late, you can expect to have $500 in interest and penalties tacked on to your tax bill.
This is certainly inconvenient, but the penalties for not filing your tax return at all (if you owe money) are ten times as severe. The monthly rate jumps up to 5%, and you'll still pay interest. The maximum is still capped at 25% of the amount you owe, but this accumulates much faster. After just three months, if you owe $5,000 and didn't file your return, your tab will jump by $750, not including interest.
The point is that even if you can't afford to pay the entire balance, it's still important to observe these deadlines when it comes to filing your return. The IRS is quite flexible when it comes to payment plans or other arrangements, so if you can't pay, file a return anyway and consider your options.