Thousands upon thousands of people miss the tax-filing deadline every year. Believe it or not, many of those people choose to not even file, risking future trouble if they are ever audited. If you are one of those people who missed the tax deadline this year, then there are certainly many available options that will allow you to still file and pay properly.
File for An Extension
Need a filing extension? No problem. Believe it or not, everyone is eligible to file for a tax extension. This extension will allow you until October 15th to file tax paperwork. There is however one catch; if you owe the IRS money, then those payments are due by April 15th. In that case, even if you file for a tax deadline extension, you need to send in an estimate of the taxes you owe. Failure to do so can result in fines or penalties. Filing electronically is your best bet, especially if you are way past the deadline.
Penalties for Not Filing a Tax Return
There are penalties involved if you do not file and pay your owed taxes. Here is a breakdown of what you will face:
- Failure to file or (FTF) penalty assessed at 5% per month or partial month up to a 25% maximum.
- Failure to pay (FTP) penalty assessed at 0.5% per month or partial month up to a 25% maximum.
- If both the FTF and FTP penalties are assessed, the FTF penalty is reduced by the FTP penalty.
Complicated? A little. So why not just go ahead and file? Failure to pay your taxes can result in fines, ruined credit, or even jail time. None of which you will want to deal with.
What If You Can’t Pay Your Taxes?
Most people look at the IRS as a cutthroat entity. While the IRS does indeed want to get all money owed to them, they also offer a number of payment options and other resources to help you get you taxes paid, both back and current.
After you file your taxes or file for an extension, you need to communicate with the IRS and try to negotiate a payment plan so you can pay the IRS your taxes. You can ask for an extension (a set time frame to pay your tax bill), or enter into a payment plan. This will at least allow you to pay for your taxes over a longer period of time. Some other good resources to use are a peer-to-peer lending company like Lending Club.