The federal income tax deadline has passed. However, some taxpayers have not filed their 2020 tax returns or have not paid their taxes.
If a taxpayer qualifies for a refund, there is no late filing penalty. On the other hand, taxes due and unpaid before May 17, 2021, are subject to penalties and interest.
Anyone who hasn't filed a tax return and has taxes owed should take action as soon as possible and pay as much as possible to reduce penalties and interest. Electronic filing options, including the IRS free file, are still available on IRS.gov until October 15, 2021, for preparing and submitting returns electronically.
Next, taxpayers need to review their payment options. The Internal Revenue has information for taxpayers who cannot pay the taxes owed.
Some taxpayers may have more time to file their tax returns and pay their taxes. This includes some disaster victims, taxpayers living abroad, some members of the military, and adequate support personnel in combat zones.
Early filing is very important, as the penalties for late filing and payment of unpaid taxes increase rapidly. However, in some cases, a taxpayer who files the return after the deadline may benefit from a reduction in the fine. Those paying a fine can contact the IRS by calling the number on their notice and explaining why they couldn't file and pay on time.
Taxpayers with a history of filing and paying on time can generally benefit from an administrative penalty waiver. A taxpayer is generally eligible if he has filed and paid on time within the past three years and they meet other requirements.
State filing and payment deadlines may differ from the federal deadline.
What do you do if you miss the tax deadline?
Complete the tax return correctly as you normally would. Fill your W-2, 1099, or other tax return forms. The only thing that may differ from filing during tax season is the taxes you will need to pay if you don't request an extension.
How can I file a state return late?
If you haven't filed by the deadline, you should go ahead and file a late return. There are probably penalties associated with it, but it is better to file a return than not. Please fill out the state return as you would under normal circumstances and file it.
How to know if your tax return has been accepted
After you file your electronic return, you will get an email from Uncle Sam within 48 hours indicating if your return has been rejected or accepted. If your return was rejected, please log back into your account, make corrections and resubmit. If you file your tax return before October 15 and it is rejected, you will have until October 20 to make the corrections.
Do I have to complete a tax return if I need a refund?
Yes, you need to file a tax return to be eligible to get a refund. There will be no fines if you do not file the return, but the IRS will not send the money to you until you file the return. If you've already missed a year, be sure to file your return within three years to receive a tax credit or refund. After three years, you will lose the refund.
Do I pay a fine if I did not request an extension?
If you haven't asked for an extension, you probably owe the IRS a fee (unless you're waiting for a refund). The late registration fee is normally 5% of the tax due each month, up to 25%. You will also owe late payment interest at the rate of 0.5% per month, up to 25% of your unpaid tax balance.
How do I pay taxes and/or fines?
There are various payment options when filing your taxes. Pay by debit card, credit card, or withdraw funds directly from your account. Most IRS offices even accept cash. If you need a waiting period, there is a penalty relief of six months for taxpayers with a certain income.
Are there payment plans for late taxpayers?
Yes. The Internal Revenue offers three payment plans: two long terms and a short-term. The short-term plan lasts for less than 120 days. There is no setup fee attached, but fees may apply if you are paying by card. Both long-term plans are for longer periods than 120 days. One plan is for direct debit, and the other is for any other check, electronic payment, or money order.
What happens if you don't file taxes?
If you choose not to pay your taxes upfront, old Uncle Sam will continue to penalize and charge you interest until you pay the full amount. In several cases, the IRS will determine the amount owed based on a substitute return. This reimbursement will be calculated based on the information you receive from other sources and will generally not be as favorable as the statement prepared. Once the IRS determines an amount owed, it can place a levy on your salary, bank account, or lien on your property. If things progress, they can send you to jail.
Asking for an extension and paying the fees before the deadline will always be better than postponing it.
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Dennis Jao