When April rolls around and you haven't yet filed your taxes, you may start to wonder how late you can file your taxes before the IRS starts sending hounds to your door. OK, they probably don't have hounds, but I'm irrationally afraid of the IRS and so are most young people I know, because taxes seem so scary.
But the truth is, taxes shouldn't be something you freak out about or avoid until the last minute. For most people they're actually not that complicated. And secondly, you should embrace them — because getting on track financially is so important. Mastering your taxes might seem like a chore, but it's also a big step in the right direction.
"Whether it's buying a home, starting a business, planning a wedding, or simply building up an emergency fund, many of the goals an individual wants to accomplish in life require managing, budgeting, and saving money," Heather Roche, Vice President of Deposits at Discover, tells Bustle. "Learning how to take control of your finances and manage money will help make some of life's biggest goals less stressful and leave you more financially secure in the future."
So think of doing your taxes as just managing your finances and earning some grown-up brownie points. Here's what you need to know about when you should file your taxes.
Yes, You Do Need To File
You should almost certainly file them. OK, so you don't technically have to file taxes unless you meet the filing income threshold. The threshold varies by factors like age and marital status, but if you're single and under 65, the filing threshold for this year is $10,400.
Even if you don't technically have to file, you still might want to — because you could be entitled for a refund. "Some millennials believe they don't need to file since they make under the IRS filing threshold... " Mike D'Avolio, CPA and Senior Tax Analyst, Intuit ProConnect Group, tells Bustle. "But the IRS reports they are holding onto close to $1 billion every year in unclaimed refunds. Some of these refunds belong to millennials, and if they had federal taxes deducted from their paychecks and may be eligible for refundable credits (like the earned income tax credit), this means they should definitely file their taxes. The IRS states that the average unclaimed refund is about $700 — it's possible some millennials might not even know if they’re owed this money."
Most People Need To File By April 17, 2018
If you are filing, then this month is your last chance to do it on time. 'Tax Day", which is maybe the least fun holiday of the year, usually falls somewhere in mid-April and this year that day is Tuesday, April 17, 2018. That's the day that your federal tax is due. There are also state tax deadlines, most of which fall on the same day as the federal deadline — but not all of them do, so be sure to check when your state taxes are due.
If you live outside of the U.S., you have a little bit longer. You are automatically given a two-month extension on your taxes — meaning yours wouldn't be due until June. If you owe taxes, however, you may be liable to pay interest on the amount if you do not pay before the April deadline, so make sure you talk to an expert if you have any questions.
You Can Get An Extension, But There Are Penalties
You do have the option to file an extension on your taxes. In fact, the process is very straightforward and it will give you an extra six months to pay — meaning your taxes would not be due until October 15, 2018. But this can incur a penalty and you'll have to pay interest on any taxes that were due in April but weren't paid until later. So though it's really easy to file an extension, you may want to talk to an expert to see if this option is really the right one for you.
Filing your taxes can seem scary if you're not used to it, but it's really nothing to be afraid of. Sorting out your finances and your relationship with money as so many benefits.
"If you have a good relationship with money, then it generally means you have more choices in the rest of your life," Kimberly Palmer, NerdWallet's banking and credit card expert, tells Bustle. "Your relationship with money literally influences the rest of your life choices — where you live, whether you get married (and possibly even to whom), when and if you have kids, what vacations you go on, what education and career you pursue — it affects everything. If you prioritize improving your relationship with money, then often, the rest of your goals in life will follow." Sure, that's a lofty proposition — but filing your taxes is the first step.