Filing your taxes late? Here’s what you need to know
What if, if I miss the deadline for filing taxes accidentally? Well, the IRS provides you with many options to file taxes even if it’s late.
Filing taxes late is not a big deal as long as you are filing them. People file their taxes late for many reasons. But here are a few steps you should take if you delay tax filing.
Request for an extension.
This means you can fill the 4868 form and request more time. But the point is that you should apply for the extension before the tax deadline. Extensions will be automatically approved. You can make use of a free file for applying online. Here you will get an extension time of up to six months. The IRS can provide an extension even without asking under certain special circumstances. Citizens residing outside the US, military officers, victims of natural disasters, and some others enjoy this provision.
Pay as much as you can
If you file for an extension and owe tax, it’s better to pay the full amount or at least as much as you can, and as soon as possible. A tax filing extension doesn’t mean you get more time to pay. The extension only gives you more time to calculate and review your tax benefits. You are still subject to payment and yes, you still owe interest to late payment.
Are there penalties for late payment?
Unless you’ve applied for an extension, you will have to pay a penalty of 5% of your tax for every month you’ve delayed. The minimum penalty is $100 or 100% of the tax due with returns, whichever is less. The extension wipes out the penalty charge.
So you can lower the penalty by filing your taxes earlier. If you do have a valid explanation for filing late, you may be excluded from bearing the penalty.
You are also subject to penalty if you owe taxes from previous years. Even if you have applied for an extension, you should pay the tax before the deadline. If not, you will have a penalty of 0.5% of your tax per month.
What if there are tax returns expected?
If you are expecting a tax return from the IRS, that’s great news and you will not bear a penalty, even if you do not file your tax on time.
When tax returns are expected, and you file your taxes late, the IRS gets to keep your returns until the returns have been processed! So, it’s definitely in your favor to file your tax on time.
What happens if taxes are ignored consecutively?
There may be times when individuals are not in a position to file their tax. However, regardless of the validity of the reason, if tax filing is ignored for a long time, the IRS may:-
- File extra charges for tax evasion
- Seize your property
- Claim a notice of Federal Tax Lien.
- Revoke your Passport.
Remedial measures and getting help:
Delaying the filing of tax is not a criminal offense but not paying the tax at all not is. So if you’re in a tight spot try:
- Using a Credit card
- Paying in Installments – Form 9465
- “offers in compromise” – Form 656
Taxes can be a complicated affair for many, so don’t hesitate to get professional help. We’re here to help you find the best options for you and help you navigate through your finances with the best possible outcomes. Give us a call today!