April 15 is one of the most dreaded dates in America, as millions of taxpayers who waited until the last minute to prepare and file their tax returns rush to get them done. Yet given how easy it is to get a six-month extension -- all it takes is filing a single form -- it's surprising that Oct. 15 doesn't have an equally harried reputation.
According to the IRS, more than 12 million taxpayers filed for extensions this year, and many of them haven't yet filed their returns.
If you filed to get an extension back in April, then your extra six months of preparation time is almost over. Here are some things you need to keep in mind as you finally get to work preparing your taxes.
1. You Might Still Have More Time
Even though Oct. 15 is the last-gasp deadline for most taxpayers, some special provisions allow certain people to get even more time to file their returns. Members of the military who are serving in combat zones, including Afghanistan, usually have 180 days after they leave the combat zone in order to file returns and pay taxes. In addition, due to the devastating natural disasters in Colorado, taxpayers in certain counties affected by flooding, landslides, mudslides, and severe storms will have until December 2 to file.
%VIRTUAL-article-sponsoredlinks%Also, those who live out of the country might be able to get further extensions. Those who are outside of the country can request an additional two-month extension, which the IRS has discretion to accept or deny. For more on these extensions, look at IRS Publication 54.
Most people, however, won't qualify for these rare exceptions. In particular, don't expect a government shutdown to save you from the Oct. 15 deadline, as you will still be responsible for filing your return on time -- even if there aren't any IRS workers to offer you assistance with your return.
2. Can't Pay? File Anyway
Many taxpayers assume that if they don't have the money to pay their taxes, then there's no point in filing a return. But the penalties that the IRS imposes are much larger for those who don't file a return at all than they are if you file a return but can't pay on time.
Specifically, the IRS will charge you 5 percent of your unpaid tax bill every month that your return is filed late, up to a maximum of 25 percent. But if you file on time and merely pay late, that penalty is just 0.5 percent per month -- a tenth as much.
3. Didn't Pay in April? You Might Owe Penalties
Even if you got an extension back in April, you could still owe penalties if you show an amount due on your October return. That's because the automatic six-month provisions only give you an extension of time to file your return, not to pay the tax you owe. Even if you paid some of your taxes based on your estimated tax liability back in April, you could still be on the hook for penalties if you guessed wrong. Be sure to look at this information from the IRS to see if you qualify for an exemption from penalties.
4. Self-Employed Workers Can Get an Extra Tax Break
One way that last-minute filers get extra tax savings is by contributing to a traditional IRA. Unlike most deductions, which have to be based on actions taken before December 31, IRA contributions can qualify up until April 15. But even if you get an extension, regular IRA contributions can't qualify for 2012 tax year deductions after the April 15 date.
However, self-employed workers who have either an SEP-IRA or a solo 401(k) plan can make additional contributions for the 2012 tax year through the Oct. 15 deadline if they requested an extension on their taxes. So if you have self-employment income and are looking for an extra tax break, funding an already-existing SEP-IRA or solo 401(k) can save you some money.
With less than two weeks before the deadline, you can't afford to procrastinate any longer. Use these tips as motivators to help you get your taxes done before it's too late.
Most outrageous tax cheats
4 Things Tax Procrastinators Need to Know About Oct. 15
To reduce his tax liability, Michael Chen, the owner of Fune Ya Japanese Restaurant in San Francisco, hid cash transaction records in 26 boxes labeled "Seasoned Octopus" in a crawl space under his restaurant and pretended they were never made, according to the IRS.
While he had an encrypted spreadsheet showing total sales of nearly $2 million between 2004 and 2006, he only reported sales of a little over $500,000 on his tax returns. Chen was sentenced to almost three years in prison in January, and he must pay restitution of $459,105.
Lori Wiley-Drones and Edward Drones, of Anchorage, Alaska, adopted a child who had a trust fund of more than $830,000. The child, who was abused by previous foster parents, was granted the trust as the result of a lawsuit claiming the state of Alaska failed to protect him.
The Drones were required to keep the trust completely separate from their own accounts, but they couldn't resist dipping into the money. They allegedly used it to remodel their home, pay credit card bills, buy cars and even splurge on Coach purses and jewelry -- leaving only $15.05 in the child's trust fund.
They also neglected to report the the funds as income on their tax returns, according to the IRS. But they were finally caught, and in March the couple was sentenced to nearly four years in prison and required to pay restitution of $829,417.
Archie Cabello, from Portland, Ore., used his job as an armored truck driver to cash in on a huge pile of cash that he was supposed to protect. Cabello wastransporting $7 million for Oregon Armored Services.
To carry out the scheme, his brother took two bricks of hundred dollar bills totaling $3 million from the back of the truck and drove it to a safe deposit box, while Cabello handcuffed himself to the truck door to make it look like he had been robbed and told a passerby to call the police, according to the IRS.
Cabello allegedly spent $1 million by the time he was caught. The IRS nabbed him for failing to report the stolen funds on his taxes. Even if money is received illegally, it's still considered income so you're required to report it to the IRS. He pleaded guilty to a number of charges, including conspiracy to commit bank larceny, money laundering and filing a fraudulent tax return, and he was sentenced to 20 years in jail.
To get out of paying $220,000 in taxes, James Stuart, from Hartland, Wisc., failed to report $900,000 in income between 2005 to 2007 -- allegedly telling the IRS he didn't have a social security number, he wasn't an American citizen and the IRS didn't have the right to tax him.
But perhaps his most bizarre claim of all was that he had "loaned his consciousness to a trust entity" and therefore couldn't pay taxes, according to the IRS. Stuart was sentenced to nearly three years in prison and fined $6,000.
Monty Ervin, from Montgomery, Ala., allegedly neglected to report more than $9 million in rental income from his property management company and failed to pay $1 million in income tax. To justify the tax evasion, Ervin attempted to renounce his U.S. citizenship multiple times, saying he was a "sovereign citizen" and not subject to the law.
He even allegedly claimed that he was the governor of Alabama in its "original jurisdiction," and the government found that he had buried $350,000 worth of gold coins in his yard. When he was arrested this March, the Justice Department said he was carrying a notebook with coordinates for an island off the coast of Honduras.
Ervin was sentenced to 10 years in prison and is required to pay $1.4 million in restitution to the IRS.
The American Opportunity tax credit, which replaced the Hope Scholarship credit in 2009, covers more years of college and offers bigger, better benefits to more taxpaying students or their families. Here's how the American Opportunity tax credit and Lifetime Learning credit, another helpful education tax credit, can help offset the rising cost of attending college.