What to Do If You Have Not Filed Your Income Taxes
Individual income tax returns are due on April 15th. If you need additional time to complete your tax return, you can file for a 6-month extension. This puts the final due date for your individual income tax on October 15th. If either 15th deadline falls on a weekend, the due date moves to the next business day. That gives you approximately 319 days to file a tax return. What if you did not get your return done on time?
Even though you are late, it is still better to file a tax return than to not. Ignoring the problem will make it worse. The main reason is how high the Failure to File penalty is for taxpayers. The minimum fee is $205 or 100% of the unpaid tax if it is under $205. It can be 5% of the unpaid tax up to a maximum of 25% of the unpaid tax. If, for example, you had $1,000 in unpaid taxes, you could end up paying an extra $250 in penalties with more in interest. Everyone would agree that it is not a wise use of hard-earned money.
If you cannot afford to pay the taxes owed, file the return anyway. The IRS has options for short term and long-term payment plans. If you owe less than $50,000 in combined taxes, penalties, and interest, you can even apply online for a long-term payment plan (that number is $100,000 for a short-term plan). One of the caveats to that is that you must have all tax returns filed. On the flip side, you have three years from the deadline to claim your refund. After the deadline, that refund is forfeit and goes to the government.
If you need help getting caught up on old tax returns, now is a good time to get current! Give us a call, and we will do our best to help you.