What happens if I didn’t pay or file my taxes by the deadline?
Tax season for 2019 (2018 taxes filed in 2019) is finally over. The staff at SBS couldn’t be happier. We worked a lot this season and helped a lot of people. We all really need a break and we are planning vacations, long weekends and reconnecting with family and friends.
Even though we prepared a lot of tax returns prior to April 15, there are still some that haven’t filed. So, what happens if you didn’t file or pay your taxes by the due date? Well, there are 2 penalties which you need to worry about: failure to file and/or failure to pay.
Failure to file comes into effect when no return is submitted before the due date. It is also the much harsher penalty, 5% of the taxes owed for every month your return is not submitted up to a 25% maximum.
Failure to pay is .5% of the tax owed for every month the taxes remain unpaid. Please note that for every month that the failure to file and failure to pay both apply, the failure to pay is waived.
As you can see, it is better to file a return and then work out how to pay rather than not filing because you might owe.
The worst thing you can do is ignore the IRS. They will work with you to resolve your tax issues. They have several programs including installment agreements and offer in compromises.
If you need help filing your tax return or other questions, give us a call at 260-407-5000.