So the tax deadline has come and gone and you never filed your taxes. You may be thinking, what should I do now? Do I file my return? Do I just skip it this year? What will happen to me if I just don’t file? Can I still ask for an extension? One thing you don’t want to do is to wait any longer. If you have not yet filed your taxes, you cannot just ignore them and if you do you may be faced with penalties, fines and more. If you can get them filed right away then just do it.
What Happens When You Don’t File Your Return?
If you have not filed your taxes yet, be prepared to pay penalty fees if taxes were owed. Here is a look at the additional fees you might now be paying and what can happen if you are owed a refund.
- Failure to File Penalties: For every month that you wait to file your taxes, you will be assessed a 5% late file fee up to a total of 25%. Especially if your tax bill is high, this fee can be pricey. To avoid a failure to file penalty the best thing to do would be to file your taxes ASAP, even if you can’t pay in full.
- Failure to Pay Penalties: When you don’t pay your tax bill on time the IRS will tack a failure to pay penalty onto your tax bill. The failure to pay penalty will be assessed monthly and is ½ of 1% of your total bill up to a total of 25%. One thing to note is that the failure to pay penalty and failure to file penalty will not be charged at the same time. The failure to pay penalty is typically charged when a taxpayer filed their taxes but didn’t pay. If taxes are unpaid and unfiled the failure to pay penalty will kick in after the failure to file penalty has been maxed out.
- Loss of Your Refund: If you did not file your taxes and are entitled to a refund, you could lose your refund if you do not file. In order to avoid losing money, prepare and file your return as soon as possible. Generally after three years, if you have not filed a return that is due a refund, you forfeit your money.
What If You Didn’t File Because You Couldn’t Pay?
If you did not file your tax return because you couldn’t pay your bill, don’t wait another day to file. Failure to file fees are more expensive that failure to pay penalties and if you can’t pay your bill in full, there are options that might help. First, if you can pay part of your bill, submit what you can with your return. Then, try to come up with the remainder of the money. Can you take the money owed out of savings? Do you have a credit card that you can put your bill on? Additionally, in most cases you can set up an installment agreement with the IRS and in extreme cases you may be able to get an offer in compromise. If you are struggling with what your best option is, see if your tax preparer can help or call the IRS directly.
What Can Happen To Me If I Don’t File And Pay My Taxes?
The worst thing you can do is nothing. Not filing your return can lead to the IRS preparing your return for you. This is something you will want to avoid. When the IRS prepares your return they do not look for deductions that you would claim if preparing your own return. After they prepare your return, the IRS will send you a bill. If you do not pay, the IRS has the right to garnish your wages, seize your property and in extreme cases they can file criminal charges against you that can land you in jail.
In conclusion, if you have not yet filed your 2010 tax return or any previous year return, the sooner you get them done, the better off you will be. Your best bet now is to gather the information you need and start filling out the forms you need to file. If you are unsure about how to prepare your return it may be best to seek help from a tax professional.