Missed Your Tax

According to the IRS, nearly one in three taxpayers miss the April 15th deadline for filing their taxes. If you find yourself in this situation, there are a few steps you can take to get back on track. First, file your return as soon as possible. This will help to lessen any penalties or interest charges that may be assessed. You should also consider contacting the IRS to set up a payment plan. If you’re unable to pay your taxes in full, the IRS may be willing to work with you to set up a manageable payment schedule. Finally, if you need immediate access to funds, you may be able to apply for an emergency personal loan from a financial institution. These loans typically come with high-interest rates, so they should only be used as a last resort. If you take these steps, you’ll be back on track in no time.

Here is a more detailed look at the steps you can take to get back on track if you missed your tax filing deadline. 

What happens if I file my taxes late?

If you file your taxes late, you may have to pay penalties and interest. The penalty amount will depend on the type of tax you owe and how late you file. Penalties can be as much as $100 per day for each day your return is late, up to a maximum of $5,000 per year.

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If you are subject to income tax, the interest you owe on any unpaid taxes also increases by 1% per month from the due date of your return until paid. In addition, if your return is filed after April 15th of any year (the IRS extended the deadline for 2021 taxes to April 18, 2022), you may have to pay an additional tax equal to 20% of the amount shown on your return for that year (subject to certain limitations).

If you don’t pay the taxes you owe, the IRS can file a collection action against you in court. In addition, the IRS may impose a lien on your property (including your home) to try to get the money you owe. If your tax bill gets really out of hand, the IRS can have you jailed, so you must take steps to get your tax situation back on track quickly. 

What can I do if I’m behind on my taxes?

There are several things that you can do if you are behind on your taxes:

  1. Try to catch up by paying as much of your taxes as possible as soon as you can. This will help reduce the interest and penalties you will have to pay when you file your return late. You can also estimate how much money you may owe in back taxes and make arrangements to pay this amount in one lump sum.
  2. Request a tax extension. If filing your return by paper, request an automatic six-month extension by completing Form 4868, Request for Automatic Extension of Time To File U.S. Individual Income Tax Return. If filing electronically, go to IRS.gov, click on “Taxes,” and select “File Your Tax Extension.”
  3. Consider using an installment agreement with the IRS. This can help you keep your tax debt low by allowing you to pay it over a period of time (usually 12 months). You can find more information about installment agreements on IRS.gov or call 1-800-908-9536.
  4. Talk to a tax professional about options available to you, such as filing an installment agreement or claiming a refund due to unusual circumstances such as a loss of income or a job change that would affect your taxes.
  5. Readjust your budget to get back on track. You’ll need to pay your taxes and late penalties as soon as possible, which means that you’ll most likely need to move money around to cover the debt. Many taxpayers end up getting debt consolidation loans to help free up money from their other debts to knock out their tax payments quickly and avoid accruing interest on their tax bills. 
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The bottom line

We all make mistakes, so you mustn’t beat yourself up about missing the tax deadline this year. The IRS has dealt with this issue many times and will work with you to get things squared away. The worst thing you can do, though, is to avoid the problem altogether, as the fees and interest can mount quickly. Talk to a tax professional if you need assistance, and give yourself grace – it will all work out in the end.

 

Originally posted 2022-09-02 00:13:10.

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