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Believe it or not, many people miss the tax date, even though it’s something they know in the back of their minds. While during the pandemic, the tax filing date was extended to May, taxes are typically due in mid-April every year for the previous tax year.
Unfortunately, even though most people know the tax deadline, they still miss it for a variety of reasons, including the fact they simply forget to file their taxes.
Missing the tax deadline isn’t the end of the world, but you could pay penalties if you pay late. If you know you’re already going to owe a lot of money, there’s no reason to pay late and deal with additional penalties that increase your tax burden.
Unfortunately, many people will miss the tax deadline this year for several reasons. However, you need to know what to do if you miss this important deadline.
You can’t simply wait for next year to roll around to pay taxes on two years. Here’s what to do if you miss the tax date.
If you missed the tax deadline, you should try to e-file your returns, which you can do on the IRS website or through tax software, as soon as possible to reduce costs associated with penalties.
If you’re filing taxes for an incorporated business, you might have to work with an accountant who can help you find out how much you’ll owe in taxes and what penalties you can expect.
The IRS allows you to file your taxes through mid-October, which is the deadline for late filing if you receive an extension. Additionally, if your income is less than $57,000, you can file for free on the IRS website.
Unfortunately, if you don’t file an extension for your business taxes, you’ll be slapped with a failure to pay a penalty of 0.5% of the amount you owe in taxes for every month your taxes are late.
The penalty for filing late is more expensive than paying late, so it’s always best to file your taxes before the deadline, even if you won’t be able to pay on time.
Pay As Much As Possible
Even if you can’t afford to pay your entire tax bill, you should always pay as much as you can. Don’t be tempted to hold off on filing your returns until you can pay your taxes because you’ll end up with a huge penalty.
If you are filing your returns late, pay as much as possible as soon as possible to minimize the amount you’ll pay in penalties and interest.
Even though the penalty is a fraction of a percentage, it will add up quickly, especially if you owe thousands of dollars in taxes.
If you need more time to pay your taxes, the IRS offers different payment plans with installment agreements for individuals and business owners.
However, your eligibility will depend on the amount you owe. You’ll also be expected to pay penalties and interest, which will accrue until your total bill is paid. However, as long as you make payments on time, you shouldn’t have to pay any additional fees.
The IRS understands that some circumstances and situations will prevent you from filing your tax returns.
For example, if you’re out of the country during the deadline, you will have an additional two months to file and pay taxes without penalties.
If you need more time to file your tax return for any reason, you can request an extension. However, you should still pay any taxes you’ll owe as soon as possible.
In some situations, you may be able to get your penalties waived. For example, if you couldn’t file your returns because of a situation that you couldn’t control, such as surgery or illness.
When You Expect a Refund
If you’re owed a refund on your taxes, you won’t pay penalties for filing late, but that’s all the more reason to file your taxes on time.
If you want to receive your refund as soon as possible, you should always file before the deadline. However, it’s not the end of the world if you file late; it just means it will take the IRS longer to process your return and send you a check.
Additionally, just because you’re getting a refund doesn’t mean you should put off filing your returns; you only have three years from the deadline to receive your refund.
If you don’t file in time, you forfeit your refund and will receive nothing back from the IRS.
Don’t Avoid Filing
Not filing your taxes doesn’t mean you won’t still owe the IRS money. The IRS will notice if you don’t file your return, even though it might take months or years for them to catch you.
If you don’t file your taxes, the IRS will send you a letter about your outstanding tax liability. By the time the IRS catches you, you likely have hundreds if not thousands of dollars in penalties, interest, and other various fees.
If you ignore the IRS, they could put a lien on your house, which means you may have been paying down a mortgage loan on a home that the government can claim.
The IRS can also audit you. Not paying your taxes can have disastrous consequences and add up to major financial problems. Not paying your taxes means you could lose your business and your home.
Pay Taxes and Penalties
If you file your tax return late, you’ll still have options for paying your taxes and penalties. You can use your debit or credit card or have the money withdrawn from your bank account.
However, if you need a grace period, you might be able to get relief for six months if you have a certain income.
There are a few different payment options available, so it’s always best to get into contact with the IRS to discuss your options.
Filing Your Taxes
If you missed the tax deadline this year, consider filing as soon as possible and pay as much of your taxes as you can. While it might not always be possible to pay your taxes all at once, you should at least file by the deadline to avoid penalties and fees.