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What Happens If You Miss a Tax Deadline?

a woman filing her taxes

Although you’re not likely to get in serious trouble if you miss filing your taxes for a refund, the Internal Revenue Service may impose penalties if you owe them any taxes. Hence, to be on the safe side, it’s always better to file your taxes way before the deadline approaches.

Not only will it give you peace of mind, but it will also ensure that you can make amendments without going through a lengthy process that involves filling out multiple forms.

 

However, if you do miss a tax deadline, here’s all you need to know about what to do next:

 

If you owe to the IRS, pay as much as possible

As we mentioned, the IRS may penalize you if you owe them any taxes. If you weren’t diligent and missed the deadline to pay them, you should pay the amount due as soon and as much as possible. This will allow you to reduce any further penalties or interest on the tax account. These penalties may include a failure to pay the penalty or a failure to file a penalty.

 

When you file the returns late, the IRS will assess the failure to pay the penalty as you didn’t pay the amount due before the deadline. The unpaid tax must be reported on your tax return immediately.

How does the IRS calculate the penalty?

The IRS will calculate the failure to pay the penalty with a 5% rate of your unpaid taxes every month that your tax return is late. But the total penalty will not exceed more than 25% of the total unpaid taxes.

a man working on their laptop and speaking to their tax consultant in a cafe

Requesting your tax refund on time

If you don’t owe the IRS any taxes, you must still file your taxes for a refund. The IRS will usually allow you a grace period of 3 years before you file your refund. After 3 years, they will automatically forfeit the tax refund. That’s why it’s better to file your taxes as soon as possible.

 

If you’re looking for a professional tax preparation service in San Francisco Bay Area, Nidhi Jain CPA has got you covered. We provide innovative tax planning and business tax filing in Bay Area. Our highly qualified and experienced certified public accountant in USA offer back tax solutions, bookkeeping, and payroll services.

 

Call us today to learn more about our professional accounting services.

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How to Prepare for an IRS Payment Plan When You Cannot Pay Your Tax Balance

Receiving an IRS notice showing a tax balance can be stressful, particularly when paying the full amount is not financially realistic. Ignoring the balance, however, does not make the liability disappear. Interest and applicable penalties can continue to accrue until the amount is paid.

This guide explains what taxpayers should organize before requesting an arrangement, what payment options may be available, and how IRS payment plan help can make the process easier to navigate.

Start by Understanding What You Owe

Before requesting a payment arrangement, review your IRS notices and determine the tax year, outstanding balance, penalties, and interest involved. Your IRS Online Account can provide information about your current balance and payment history.

If you have unfiled returns, address those obligations as well. Generally, taxpayers must be current with required filings before certain payment plans can be considered.

Prepare the Information the IRS May Need

Having your financial information organized before applying can make the process more manageable.

Gather Your Tax Records

Keep copies of relevant tax returns, IRS notices, previous payment records, and correspondence together. This gives you a clearer picture of the liability you are trying to resolve.

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Review Your Income

Collect recent information showing wages, self-employment income, investment income, or other sources of money you receive. Accurate income information can be important when determining what payment arrangement may be appropriate.

Document Your Regular Expenses

Review housing, utilities, transportation, insurance, food, medical expenses, debt payments, and other recurring costs. Some situations may require additional financial information or collection forms.

Do Not Wait Until Collection Problems Escalate

Addressing an unpaid balance promptly gives you more opportunity to understand available options. If you cannot pay everything immediately, paying what you can and exploring an arrangement may be preferable to simply ignoring the liability.

Professional tax resolution services can also help taxpayers review their circumstances and understand potential approaches for addressing outstanding liabilities.

Get Help Addressing an Outstanding Tax Balance

Tax debt can involve more than simply choosing a monthly payment amount. Nidhi Jain CPA provides back tax solution support, tax planning, and accounting guidance to help taxpayers understand their obligations and work toward addressing outstanding balances.

If you need a tax advisor in the Bay Area for an unresolved tax matter, contact Nidhi Jain CPA to discuss your situation.

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