Filing Taxes After the Deadline

(July 2024)

Filing Taxes After the Deadline

In This Article

Have you ever missed the tax deadline? Do you know what to do if you file your tax return late? Are you aware of the penalties and consequences that you may face for not paying your tax on time? If these questions are your worries, you are in the right place.

Filing your tax after the deadline can be a stressful and costly experience. However, there are some steps you can take to minimize the damage and avoid further complications.

However, this article presents you with the golden tips and tricks that can help you deal with the IRS and get your tax situation under control. Whether you need an extension, a payment plan, a penalty relief, or professional guidance, all you have to do is to read this article till the end. You can dive in now!

Take the following steps if you fail to file your tax return by the deadline.

  1. Be Aware of the Penalties
  2. Request for an Extension
  3. Know How Tax Refund Can Save You
  4. Seek Professional Guidance
  5. Be Aware of Other Consequences
  6. Pay As Much As You Can to Reduce the Penalties
  7. Check If You Qualify for Penalty Relief

1. Be Aware of the Penalties

Understand that the IRS may charge you two types of penalties: a failure-to-file penalty and a failure-to-pay penalty. The failure-to-file penalty is usually 5% of the unpaid tax for each month or part of a month that your return is late, up to a maximum of 25%. The failure-to-pay penalty is usually 0.5% of the unpaid tax for each month or part of a month that your payment is late, up to a maximum of 25%.

Additionally, you have to pay interest on the unpaid tax from the due date until the date of payment. The interest rate varies quarterly and is currently 3% per year, compounded daily. Therefore, to reduce the severity of the penalty, ensure you file your tax before the deadline — even if you fail to pay before the deadline.

2. Request for an Extension

Do you think you may not be able to file your tax return by the deadline? Not a bad thought though. All you need to do is to request an extension of time to file. This gives you an extra six months to file your return, but it cannot extend the time to pay your tax.

You can request an extension by filing Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, by the original due date of your return. You need to estimate your tax liability and pay any amount due with the form. If you file your return within the extension period, you may avoid the failure-to-file penalty, but you still have to pay the failure-to-pay penalty and interest on the unpaid tax.

3. Know How Tax Refund Can Save You

Don’t panic if you are due for a refund from the IRS. You may not face any penalties or interest for filing your tax return late. However, you still have to file your return as soon as possible to claim your refund.

Note that the IRS holds your refund until you file your return, and you may lose your refund if you do not file within three years of the due date. Moreover, filing your return helps you avoid identity theft and fraud, as someone else may file a fake return using your information and claim your refund.

4. Seek Professional Guidance

Are you dealing with confusion on how to file your tax return or how to deal with the penalties and interest? If yes, you may want to seek professional guidance from a tax preparer, an accountant, or a tax attorney. They can help you prepare and file your return accurately and securely, and they can also help you negotiate with the IRS for a payment plan, an installment agreement, an offer in compromise, or a penalty abatement.

However, be careful when choosing a tax professional, as some of them may charge high fees or make false promises. You must check their credentials, reviews, and references before hiring them.

5. Be Aware of Other Consequences

Keep in mind that filing your tax return late may have other consequences besides the penalties and interest. For example, you may lose some of the tax benefits that you are eligible for, such as the earned income tax credit, the child tax credit, or the education tax credit.

You may also affect your eligibility for certain government programs, such as Medicaid, the Affordable Care Act, or student loans. Furthermore, you may damage your credit score, as the IRS may file a tax lien against your property or report your unpaid tax to the credit bureaus. This may make it harder for you to get loans, mortgages, or credit cards in the future.

6. Pay As Much As You Can to Reduce the Penalties

One of the best ways to reduce the penalties and interest that the IRS may charge you is to pay as much as you can of the tax you owe by the deadline. By doing this, you can lower the amount of tax that is subject to the failure-to-pay penalty and interest, and it also shows the IRS that you are making a good-faith effort to comply with your tax obligations.

You can pay your tax online, by phone, by mail, or in person, using various methods, such as electronic funds withdrawal, credit or debit card, check or money order, or cash. You should keep a record of your payment for future reference.

7. Check If You Qualify for Penalty Relief

Are you aware that you may qualify for penalty relief? Yes, this can happen if you have a reasonable cause for filing or paying your tax late, such as a natural disaster, a serious illness, a death in the family, or a fire. You need to provide evidence of the cause and explain how it affected your ability to file or pay your taxes.

You can request penalty relief by calling the IRS, writing a letter, or filing Form 843, Claim for Refund and Request for Abatement. You may also qualify for penalty relief if you have a history of filing and paying your taxes on time and meet other requirements. You can request this type of relief by using the First Time Penalty Abatement option, which is available for certain penalties and for one tax year only.

Recap

Remember that filing your taxes after the deadline can be a daunting task, but it is not impossible. By following these steps, you can minimize the impact of the late filing and payment, and avoid further trouble with the IRS. Remember, the sooner you file and pay your tax, the better.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. . For comprehensive tax, legal or financial advice, always contact a qualified professional in your area. S’witty Kiwi assumes no liability for actions taken in reliance upon the information contained herein.

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