Did you file your taxes late? Do you wonder what happens if you file taxes late? The saying goes, there are only two things guaranteed in life; death and taxes. You’re only human if you’ve lost track of the day and realized too late that tax season had caught you unprepared.
There can be a lot of questions surrounding tax filing. When are taxes due? You may wonder when the last day to file taxes is. It is never too late to file your taxes, but there is a deadline each year to avoid penalties.
What do you do if you can’t meet the deadline? You can learn more about the last day to file taxes, penalties, extensions, etc.
You should file your taxes as soon as possible if you missed the deadline and did not file an extension. Contact a tax expert if you are confused or unsure about how to file your taxes.
File an Extension
If you know you will not be able to meet the deadline to file your taxes, consider filing an extension. The deadline for taxes in the United States is typically April 15.
If you are going to be even a single day late, you should file an extension. Regardless of how many submissions the IRS receives, they will notice if you file late. The IRS can also see the date stamp on a mailed tax return, so you should not think that a delay in mail service can be used as an excuse.
You must file as much of your 1040 as possible to file an extension. You should always ensure you properly file your tax return.
Filing an extension pushes the deadline back. This prevents you from occurring penalties for failure to file or late payment. Failing to file is a penalty because your return was not submitted on time. Penalties can quickly add up to 5% of the total amount due each month.
It is important to note that an extension is only valid for filing your return. It does not lengthen the time you have to pay owed taxes. If you think you may owe because your withholding tax was too low or unexpected income, you should estimate this amount and pay it.
How long is an extension valid?
The length of an extension will vary. You can apply for up to a six-month extension in filing your taxes. While you still need to pay your estimated owed taxes, you may have until mid-October to finalize the process.
Do your research thoroughly and know what is important about filing for a tax extension.
What Happens If You Didn’t File an Extension
You may be asking, but what if I didn’t file an extension? The consequences differ depending on whether you owe the IRS or are receiving a refund. If you owe the IRS taxes, you should file and pay as soon as possible to limit penalties and interest.
You could find yourself in a situation where you have failure to file and failure to pay penalties. Both of these will occur interest. The longer you wait, the higher the fees become.
The Consequences if You Have a Balance Due.
The consequences if you have a balance due grow the longer you postpone filing and paying.
A late payment penalty can be issued if you still owe the IRS money after the filing deadline. The penalty can amount to 0.5% of the balance owed per month. The maximum penalty that can be issued for late payment is 25% of the balance.
If you are in a situation where you did not file for an extension, you could end up paying a late filing penalty. This is also maxed at 25% of the balance due and can be issued at 5% per month.
Both penalties can cause interest as well.
The Consequences if You Are Due a Refund.
There are different laws for federal and state taxes in this regard. Remember a few key points when filing your federal taxes if you are due a return.
There are clear rights outlined in the Taxpayer Your Bill of Rights that can aid you in complying with tax laws.
There are certain tax elections that you may lose. Some of these elections are invalid after the filing due date, even if you are due a refund.
You also need to consider that the statute of limitations for the IRS to audit your return does not start until you file. The entire process can delay your refund.
With all of this in mind, it is a little-known secret that if you are due a refund, there is no penalty for filing your taxes late. You have three years to file your return in this case.
What If You Can’t Pay Owed Taxes?
You will incur penalties if you have not paid at least 90% of your taxes by the filing deadline. However, this doesn’t mean you should just ignore the money owed. It can become stressful trying to pay a bill that keeps adding more.
You can try a few alternative methods for paying your back owed taxes.
- Try alternative means of payment, such as a credit card or a loan.
- Consider asking for a payment arrangement with the IRS.
- Ask for an Offer in Compromise (OIC).
Remember that your penalties do not get lower by ignoring owed taxes. The sooner you file and pay, the better the resolution.
Are You Still Worried About Paying Your Taxes Late?
If you are still concerned about paying your taxes late or have questions about the process, get in touch with a tax expert. Make sure you’re doing everything you can to avoid major tax problems.
Indiana’s tax expert, Sherry Borshoff, can answer your questions and guide you in the right direction. Sherry believes in solving your life’s most taxing situations. Schedule a free consultation today.
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