The deadline for filing your federal tax return is April 15th. You may face penalties and interest if you file late and owe the IRS. Although falling behind on your taxes can be stressful, it’s not the end of the world. Here’s what to do if you’re filing your taxes late.
Get Organized
When it comes to filing your taxes, gathering all the necessary documents is a significant part of the process. To ensure a smooth filing experience, make sure you have the following essentials:
- Your Social Security number
- Income statements such as W-2s or 1099s
- Any documents supporting deductions and credits
- Records of estimated tax payments made
- Bank account information for direct deposit
If you’re missing any income statements, you need to contact the payer or your employer. By keeping these items handy, you’ll be better prepared to file your taxes accurately and on time.
Does the IRS Penalize You for Filing Your Taxes Late?
Taxpayers who are entitled to a refund will not be penalized for filing late. However, it’s a different story if you have a balance due. Unless you requested a filing extension, you’ll face two penalties plus interest. The failure-to-file penalty is 5% of the tax owed each month your return is late, up to a maximum of 25%. If your return is more than 60 days late, the minimum penalty is $510 or 100% of your tax bill, whichever is lower. The late payment penalty is less severe. It’s 0.5% of the tax owed each month it’s late, up to 25%. If you owe money to the IRS, it’s crucial to pay as much as you can to limit penalties and interest. Requesting an extension only gives you more time to file, it does not give you more time to pay. Late filers should also be aware that your debt will accumulate interest daily until your balance is paid in full. The interest rate is the federal short-term rate plus 3 percent. Even if you can’t afford to pay your entire tax bill, at least file and pay as much as you can to limit the penalties and interest.
Filing for an Extension
Filing for an extension can be a lifesaver if you’re dealing with a complex tax situation or need more time to gather all your necessary documents. To get an extension, you’ll need to complete IRS Form 4868, which is an application for an automatic extension of time to file your income tax return. Remember, this form must be submitted by the original tax filing deadline, typically April 15th.
By filing for an extension, you’ll receive an automatic six-month grace period, giving you until October 15th to file your tax return. However, it’s crucial to understand that this extension only applies to filing your return, not to paying any taxes you owe. You’ll still need to make estimated tax payments or pay any taxes due by the original deadline to avoid late payment penalties. This way, you can avoid additional interest and penalties on your unpaid tax.
Use Tax Software to File an Accurate Income Tax Return
Over 100 million taxpayers e-file their tax returns annually. If you’re one of those taxpayers who still files a paper return, it’s time to switch to e-file. Using tax preparation software like ezTaxReturn is not only convenient and secure, but it also saves valuable time, which is crucial when you’re already filing late. The software helps you avoid making mistakes by handling the forms and calculations for you. It guides you through your return step-by-step, asking simple questions. Just enter the information as it appears on your tax documents, and you’re good to go. By using tax software, you can quickly and accurately file your income tax return and minimize late filing penalties. Filing taxes late? Make it easy with ezTaxReturn—start now!
Managing a Balance Due
If you find yourself owing taxes and can’t pay the full amount by the tax filing deadline, don’t panic. You have several options to manage your balance due. The best approach is to pay the full amount owed as soon as possible to minimize additional penalties and interest. You can make payments online, by phone, or by mailing a check or money order.
If paying the full amount immediately isn’t feasible, consider setting up a payment plan with the IRS. This allows you to make monthly payments towards your tax bill. To initiate a payment plan, you’ll need to complete IRS Form 9465, which is an installment agreement request. Another option is to apply for an offer in compromise, which is an agreement with the IRS to settle your tax debt for less than the full amount owed. Addressing your balance due promptly can help you avoid further financial strain from late payment penalties and interest.
Don’t Lose Your Tax Refund by Not Filing
Even if you aren’t required to file a tax return, it’s a good idea to do so anyway to potentially receive a tax refund. You may be entitled to a refund for withholding or eligible for tax credits. Filing on time ensures you can claim tax credits, such as the Earned Income Tax Credit, which can significantly reduce your tax liability. The only way to find out is to prepare a tax return. Taxpayers have up to three years from the original filing deadline to claim a refund. However, the sooner you file, the faster you’ll get your money. Start your return now.
Seeking Help
If you’re feeling overwhelmed by the process of filing your taxes or managing a balance due, don’t hesitate to seek help. There are numerous tax preparation services available that can help you file your taxes and manage any balance due. These services can ensure you’re taking advantage of all the tax credits and deductions available to you. ezTaxReturn offers a range of tools and resources, from online filing options to free customer support. By seeking help and utilizing available resources, you can manage your taxes effectively and avoid unnecessary penalties or interest.
The articles and content published on this blog are provided for informational purposes only. The information presented is not intended to be, and should not be taken as, legal, financial, or professional advice. Readers are advised to seek appropriate professional guidance and conduct their own due diligence before making any decisions based on the information provided.
