You should always file your taxes by the filing deadline to avoid having to pay a late filing fee and interest, on top of any taxes you might owe. You should consult a tax professional like a Certified Public Accountant (CPA) if you have any questions about your specific tax returns. It’s always worth paying for a professional when you’re unsure, because the consequences that you could face from not filing your taxes can cause you more trouble than the effort that goes into paying those professionals.
Here’s what you need to know about making sure you file and pay your taxes on time:
You’ll pay a steep fee as soon as the filing deadline passes.
Penalties and fees apply immediately after the due date to file taxes passes. For each month you don’t file your taxes after the deadline, 5% of what you owe gets added onto your total. This continues for a maximum penalty of 25%, or 5 months.
If you don’t file within 60 days after the due date, you will owe $205 or 100% of your tax balance, whichever is the smaller amount.
You’ll have to pay fees on any late owed tax payments, even if you file on time.
You will be subject to a late payment penalty which is currently 0.5% of the tax balance you owe. This fee also has a maximum penalty of 25%. You’ll also have to pay interest on this.
Note: If you don’t file and don’t pay your taxes, the IRS won’t stack up the two fees. You’ll only be subject to the 5% penalty.
The IRS has ways of collecting payment if you avoid paying them.
If you continue to avoid paying your taxes, here are the next steps the Internal Revenue Service (IRS) can take:
- 10 days after they send you a notice in the mail, they can file a lien on your property.
- This means that the IRS will claim your property. The next step would be to seize it and sell it in order to pay off your tax debt.
- They can take your wages in order to fulfill your debt.
- They can revoke the possible refund you’re entitled to.
It’s also important to note that because this is considered debt, it will damage your credit score.
If you are unable to pay your owed taxes or file your taxes on time, you can set up a payment plan and request an extension.
If you’re unable to file your taxes by the deadline, you should apply for an extension to avoid late-filing fees. It’s important to note that you have to apply for an extension by the regular filing deadline.
The best way to handle filing your taxes is to address it right away rather than waiting. The longer you wait, the more financial challenges you’re going to have to deal with. Don’t be ashamed of applying for a payment plan or requesting an extension to file.