Tax season always seems to arrive before you can blink. For many of us, we have lots of complicated deductions and claims to make to our tax returns that can make it tough for us to file them by tax day.
If you woke up on April 16th with your tax return still sitting on your desk, you’re not alone. In fact, one of the most common tax questions is what to do if you miss the deadline!
The good news is that if you do end up missing the final day for tax filing, your next steps are pretty straightforward. So, let’s dive into what to do if you miss the tax deadline.
Missing the Tax Deadline When You Owe Money
Sometimes, you forget to file your taxes and were owed a refund. When this happens, you won’t get a penalty. In this instance, the government will simply hang onto your money until you’re ready to collect it.
You have as many as three years after the tax deadline to get that return filed and receive your refund. The government won’t charge you any interest for not collecting your refund money, so you’ll still get the full amount.
However, it’s important not to wait too long. The longer you wait to file the return, the more tax credits you could miss out on. For example, you may lose the Premium Tax Credit if you were using it to pay for insurance.
Missing the Tax Deadline When You Are Getting a Refund
If you missed the tax deadline and owe taxes, things work a little bit differently. In this situation, you will not be able to file an extension. On top of that, you’ll be charged failure-to-pay and failure-to-file penalties.
While this might seem daunting, don’t panic! You’re still able to file your return at this point. And, the sooner you get that return filed, the less money you’ll have to pay the government in penalties.
The IRS will charge you penalties on a month-to-month basis, but they can prorate them for up to one month. That means that you could avoid incurring more charges by filing sooner. At the end of a 60 day period, you will be responsible for the lesser of either $205 or 100% of the unpaid tax you owe in penalties.
If you owe taxes and missed the tax deadline, you don’t want to wait to file your taxes. In this case, your best course of action is to hire an accountant like the team at Freedom Tax Accounting. They’ll be able to help you pay the least amount of penalties and put your tax return together quickly.
Never Miss Another Tax Deadline
Now that you know what to do if you miss the tax deadline, it’s time to take action. Get your tax return filed as soon as possible so that you can avoid hefty penalties and fees.
If you enjoyed reading this article, be sure to check out our other articles on personal finance. We’re constantly publishing new content that can help you stay financially healthy.