Posted by Tiffany Gaskin

What Happens if you Miss the Tax Filing Deadline?

What Happens if you Miss the Tax Filing Deadline?

The country is gradually recovering from the Coronavirus's effects, and the tax deadline has been pushed until May 17th and while we have just over a month to the filing deadline, now is the time to gather all receipts and relevant documentation to meet up with the tax deadline as failure to file or pay might come with some consequence, such as various penalties, and this article will shed light on them. 


Failure to file penalty 

Not filing your tax return comes with a penalty equal to 5% of the unpaid amount for each month that the return is late, which could stretch up to five months. For people that filed and were late for over 60 days, what you will pay is the lower of these: 100% of the tax owed, or a particular dollar amount with a yearly inflation adjustment. 

Bear in mind that it is compulsory to pay the entire amount you owe alongside the penalty for not filing. 


Failure to Pay penalty 

Some people might file their taxes and not pay. This comes with a failure to pay penalty. Uncle Sam, in this case, will charge 0.5% of the outstanding taxes up to 25%. Your unpaid taxes will generally accrue interest specified as the federal short-term rate, alongside another 3%.

You might not have the capacity to pay your tax. However, filing is essential as the penalty for not filing is pretty grievous compared to the penalty for not paying. Besides, there is the grace to work out a payment plan with Uncle Sam to take care of the tax debt.

If Uncle Sam owes you a refund and you couldn’t file on time, you will not be penalized. This, however, does not remove the need to file as soon as possible to prevent Uncle Sam from withholding your funds. 

There is the grace to request for an extension if filing your tax on time will not be possible. You can do this online or talk to a tax professional for help. With this, you have till mid-Oct to file your taxes. 

Taxpayers should not forget that an extension to file differs from an extension to pay. As a result, make sure to estimate the taxes you might owe and pay by the due date to avoid penalties if you want a tax extension. 

After Mid May, the meter will start reading, and late filing will generate penalties for defaulters. Continually ignoring your taxes might give you more than you can chew. In other words, besides fees, you might have other unpleasant things to deal with. As an example: Uncle Sam could

  • File a federal tax lien which is like a claim on your property

  • Confiscate your properties

  • Sue, you for tax evasion.

  • Revoke your US passport 

  • Seize your refunds

  • Garnish your wages


Avoid being late 

You have more to lose if you are late with filing your taxes. You might be slammed with penalties if you owe Uncle Sam, and your refunds might be delayed if you are owed some money.

There is still some time to get your act together between now and the 2021 tax day (now May 17th). Make sure to meet with your tax professional as soon as possible. The meeting can even be remote, and you get to exchange tax documents through secure channels. With this, you can file on time and avoid any headaches with the IRS.


FOR MORE INFORMATION ON HOW TIFFANY GASKIN CAN BEST HELP YOU WITH YOUR TAX FILING NEEDS, PLEASE CLICK THE BLUE TAB ON THIS PAGE.


THANKS FOR VISITING.

Tiffany Gaskin
Contact Member