Tips for Filing Your 2015 Federal Income Tax Return

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This year’s filing deadline for most individuals is Monday, April 18, 2016, since Emancipation Day, a legal holiday in Washington D.C., falls on Friday, April 15, this year. If you live in Massachusetts or Maine, you have until Tuesday, April 19, 2016, to file, because Patriots’ Day is celebrated in both states on April 18.

If you’re not able to file your federal income tax return by the due date, you can file for an extension using IRS Form 4868. Filling this extension gives you and additional six months (until October 17, 2016) to file your federal income tax return. You can also file for an automatic six-month extension electronically.

Pay what you owe
One of the biggest mistakes you can make is not filing your return because you owe money. If the bottom line of your return shows that you owe tax, file and pay the amount due in full by the due date if at all possible. If you absolutely cannot pay what you owe, file the return and pay as much as you can afford. You’ll owe interest and possibly penalties on the unpaid tax, but you will limit the penalties assessed by filing your return on time, and you may be able to work with the IRS to pay the unpaid balance (such as entering into an installment agreement).

It’s important to understand filing for an automatic extension to file your return does not provide any additional time to pay your tax. When you file for an extension, you have to estimate the amount of tax you will owe; you should pay this amount by the April 18 due date. If you don’t, you will owe interest, and you may owe penalties as well. If the IRS believes your estimate of taxes was not reasonable, it may void your extension.

Limited planning opportunities may still be available
Though the opportunity for many potential tax-saving moves closed on December 31, the window is still open for IRA contributions. You generally have until the April due date of your federal income tax return to make contributions to a traditional or Roth IRA for the 2015 tax year. That means there’s still time to set aside up to $5,500 ($6,500 if you’re age 50 or older) in one of these tax-advantaged savings vehicles.

With a traditional IRA, you’re generally able to deduct the full amount of your contribution, provided you’re not covered by a 401(k) or another employer-sponsored retirement plan; if you or your spouse is covered by an employer plan, the ability to deduct some or all of your contribution depends on your filing status and income. With a Roth IRA, there’s no up-front deduction, so contributing won’t affect your 2015 tax situation, but it’s still worth considering given that future qualified Roth distributions are free of federal income tax. You also have until the due date of your return, including any extension, to undo (“recharacterize”) a 2015 Roth IRA conversion.

 Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016.

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