What Happens If You Miss the Tax Day Deadline?

The Tax Day deadline is upon us. Your 2023 revenue taxes are due by April 15 (until you reside in considered one of these states with computerized extensions). That implies that your tax return or your tax extension should be both accomplished and submitted electronically or postmarked by midnight tonight.

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For taxpayers who’re sure they’re going to obtain a refund on their 2023 tax return, the one hurt in lacking the tax deadline is letting the IRS maintain on to your cash longer. However, when you owe taxes, you do not wish to wait — penalties and curiosity can pile up rapidly.

This story is a part of Taxes 2024, CNET’s protection of the perfect tax software program, tax suggestions and every part else you could file your return and observe your refund.

Read on to be taught extra about what occurs to late tax returns, together with info on penalties, curiosity and cost plans. For extra, this is the perfect software program for submitting your tax return, and learn to observe your refund to your checking account after you do. 

What if I miss the deadline and I’m anticipating a tax refund?

If you are anticipating a refund from the IRS out of your 2023 tax return, there are not any penalties for submitting late. In truth, you may have three years to file your 2023 tax return earlier than the IRS turns your tax refund over to the Treasury and your cash is gone eternally.

Your tax refund may be delayed by submitting late, however you need to nonetheless anticipate to obtain your cash in 4 to 6 weeks.

You might be making good use of the cash the IRS owes you, and the longer you wait to file your taxes, the extra you lose out. Whether you utilize your tax refund to pay down bank card debt, begin an emergency fund, make investments and even simply deal with your self to a pleasant dinner or trip (relying in your refund quantity), you need your cash as quickly as attainable. Letting the IRS preserve your tax refund longer solely deprives you of attainable curiosity and spending energy.

What if I miss the deadline and I owe cash on my taxes?

If you miss the tax deadline, do not file an extension and also you owe taxes, there is a good likelihood you’ll incur each late submitting penalties and late cost penalties. You’ll additionally must pay curiosity on the cash that you just owe till it is fully paid.

What are the charges and penalties for submitting taxes late?

There are two primary penalties that the IRS prices for submitting taxes late once you owe cash: a failure-to-file penalty and a failure-to-pay penalty. On prime of that, you may additionally pay curiosity on the quantity you owe.

The failure-to-file penalty hurts essentially the most. It’s usually 5% of the quantity you owe for every month or a part of a month that your return is late, with a most penalty of 25%. If your return is greater than 60 days late, the minimal penalty is $435 or the steadiness of your taxes due, if lower than that.

The failure-to-pay penalty may even value you cash, however not practically as a lot — an enormous motive to file an extension on time even if you cannot pay something. This penalty is normally calculated at 0.5% of any taxes owed that are not paid by the deadline. The IRS once more prices the penalty for every month or a part of a month that your cost is late, with a most 25% penalty whole.

The IRS additionally prices curiosity on late taxes. Determined by including 3% to the short-term federal rate of interest, the IRS rate of interest is at present 7%. That price is adjusted quarterly, and curiosity is compounded every day.

Can I file an extension previous the tax deadline?

Unfortunately, no. Tax extensions present taxpayers six further months to finish their tax returns, however they should be filed by the tax deadline. Taxpayers submitting extensions should additionally embody the estimated amount of cash that they owe utilizing IRS Form 1040-ES. Online tax software program may rapidly calculate your estimated taxes.

If you wish to file a tax extension with the IRS, you could do it by the April 15 deadline. You can submit an extension electronically by midnight that day (native time) or mail IRS Form 4868, so long as it is postmarked April 15, 2024.

What if I file an extension on time?

If you file a tax extension by the April 15 deadline, you get an additional six months. As lengthy as you paid an estimated quantity that is near what you owe, you will not be topic to fines or penalties when you file your return and pay any remaining tax legal responsibility by Oct. 15, 2024.

If you do not pay sufficient cash along with your tax extension, you might be topic to the late cost penalty. The IRS expects your estimated cost to be no less than 90% of your whole tax legal responsibility. The company might cost a 0.5% monthly penalty on the quantity of unpaid taxes when you paid lower than that, so you need to nonetheless full your tax return and file it as quickly as attainable.

What if I can not afford to pay the taxes I owe?

Owing taxes that you do not have the cash to pay will be extremely traumatic. However, you possibly can take motion now that may lighten each your monetary and psychological burdens.

Consider an IRS cost plan. If you possibly can repay your tax debt inside 180 days, the IRS will allow you to apply for a short-term cost plan that prices nothing, though you may nonetheless accrue penalties and curiosity till your debt is paid off. It’s straightforward to use on-line or at an area IRS workplace.

If you want greater than 180 days, you possibly can apply for a long-term cost plan that prices $31 for computerized month-to-month financial institution funds through direct debit, or $130 for non-direct debit funds. Low-income taxpayers — these with adjusted gross incomes at or under 250% of the federal poverty pointers — can waive the charge for the direct-debit installment plan or pay $43 for the non-direct debit plan.

You may contemplate different borrowing choices outdoors of the IRS. If your tax legal responsibility is not too excessive, you can use a bank card with a 0% intro APR to pay your taxes, assuming you possibly can repay that debt earlier than the intro interval expires. For bigger tax money owed, you can contemplate a debt-consolidation mortgage, although your price could also be larger than the 7% at present charged by the IRS.

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