According to the IRS, April 15th is the last day you can file your taxes electronically or postmark your paper taxes.
However, unexpected situations and/or bad planning happen in life, so what happens if you’ve missed tax day deadlines? If you never filed for an extension either, then keep reading so we can go through the options you have at this point.
What To Do After A Missed Tax Day Deadline
If you don’t owe the IRS any money then you’re in luck, since no problems or penalties apply to you. However, you should get back on track and file for them as soon as possible, especially if you’re due a refund since the longer you wait to file them the longer the IRS will hold that precious refund away from your bank account.
If you’ve missed tax day deadline and DO owe the IRS money, then it’s time to take action. The number 1 solution is to file and pay as soon as you can in order to minimize any penalties and interest charges. 60 days after a missed tax day deadline, you will incur an established minimum penalty that is the lesser of $205 or 100% of the unpaid tax you owe.
If it turns out you can’t pay in full, then you should still go ahead and file while paying as much as you can, since this will show the IRS you’re actually doing something to solve the situation, facing less penalty charges.
After doing this, you should communicate with the IRS to try and negotiate a payment plan and if you still need more time, then you can apply for monthly payments through an installment agreement, a direct debit option provided by the IRS.
Get Some Extra Help!
If you’ve missed tax day deadlines and are owing money to the IRS, you’re not only owing the taxes you were supposed to pay but also the interests applied to them, and as your balance grows, so do the interests.
In this case, there are a few options you can rely on, such as penalty abatements, filing for a back tax return, or minimize the interest rates on your own. However, the smartest thing for you to do at this point will be to ask for an expert’s assistance, such as a qualified accountant, one who understands tax laws, IRS codes and forms, helping you look at the options available in detail and choose and file for the one that will work best in your favor.
The first thing an experienced tax professional can do for you is to take a look at the taxes you owe and figure out if there’s a way for them to be reduced. This way, the less taxes you are due, the less interest you’ll have to pay.
Ask a professional to review your tax return thoroughly so that they can check it’s all accurate. It’s possible they find out that you haven’t been receiving all of the credits and deductions you’re entitled to which means there’ll be less taxes to pay the IRS.
If this is not the case, an accountant will advise you to apply to any of the IRS’ penalty abatement options, identifying the right one for your situation and helping you submit your request to the agency so that you may get your penalties reduced or removed.
As we mentioned earlier, there’s still the option to set up a monthly payment plan or installment agreement. There are many different types of agreements and terms that the agency offers, and a tax professional will be the best help when it comes to evaluate the option that works best for you and applying for it.
Remember, as confusing and complicated as it all may seem, not paying your due taxes is an option that can only result in bigger problems that go way beyond a hefty penalty and bad credit scores. You could even end up in jail!
Avoid turning an unpleasant situation into an even worse one and get on track to your solution. The sooner you start, the better chance you have to come out as unaffected as possible.