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.
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.
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