Monday is Tax Day: What to Do if You Haven’t Filed Yet
Friday, April 15, 2016
If the deadline for filing your taxes with the IRS has snuck up on you this year and you find yourself still wading through tax documents, all hope is not lost (although a little bit of cash may be).
First, don’t delay any longer. Waiting won’t help and it could mean hefty penalties. If you know you’re going to owe, you’ll be in ever-hotter water with the IRS the longer you wait. Filing as soon as possible can minimize the penalties and interest you have to pay.
The quickest way to get your information to the IRS is to e-file. You can still file your returns online until October 15, which is the deadline for filing late if you have already requested an extension (you can still file Form 4868 electronically by the end of the day, April 18, and be granted a six month extension, so hop over to the IRS site right now and get that taken care of). If your income is $57,000 or less you can file for free through the IRS website.
If you miss the deadline for an extension, you’ll have to pay a failure-to-pay penalty of 5% of the taxes you owe for every month your return is late, up to a maximum of 25%. The penalty for filing late is much steeper (10 times, to be exact) than the penalty for paying late—so don’t delay.
If the problem is that you can’t afford to pay your tax bill, don’t let that be the reason you don’t file. You’ll actually just be causing yourself bigger problems. File as soon as possible and then pay what you can. The IRS offers several payment plans for individuals and business owners if you don’t have the funds to pay your bill in full. Penalties and interest will continue to accrue until the bill is paid in full but you’ll save yourself from any additional collection actions.
If you’re expecting a refund and you file late you won’t incur any penalties but the longer you wait to file the longer you’ll wait to get your refund. We can’t see the advantage of waiting to file for a refund but if that’s just the situation you’ve found yourself in, be sure to do it within three years or you’ll forfeit your refund altogether.
But even filing late—penalties and all—is better than not filing at all. No matter how little you owe, eventually you’ll hear from the IRS about your outstanding bill. And by then, it will be far more inflated than it was originally, thanks to fees, penalties, and interest. Ignore notices sent by the IRS and the next step will be a lien against your property or an audit.
If you have questions about tax law, give us a call to set up an initial consultation.
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