Keeping up to date on your income and personal taxes is something everyone should strive to maintain. However, when dire financial crises happen you can fall behind on your abilities to keep taxes up to date. This dilemma becomes much more intensive the closer it comes to the deadline to file your past years taxes. In this year specifically, that date is Wednesday, April 15th. If at all possible you should try and get your taxes files and paid by this date. If you’re unable to pay by the 15th, educate yourself about your options.
The biggest penalty that occurs from a failure to file your taxes is that you will not receive the tax refunds that are entitled to you. This refund often provides valuable financial support for millions of Americans every year, so the loss of it can be painful.
If you owe taxes, however, you will be treated differently. In this case, you will often be subjected to a “failure-to-file” penalty. This penalty amounts to 5% of any unpaid tax bills for each month your tax bill remains delinquent after the deadline of April 15th. This percentage will never reach anywhere beyond 25%.
Ignoring these payment requirements can result in fines and even jail time if the amount becomes excessive. This makes it extremely important to do anything within your power to pay any fees you owe upon receiving an extension on your tax return filings. The IRS will continue to send you frequent reminders and notices if you are ignoring your payments. Eventually, delinquent taxpayers will receive a personal visit from an IRS representative looking to collect the required payments. You will usually receive a visit from the IRS if you owe more than $25,000 in unpaid fines.
It is important to note that not all financial situations will be treated the same by the IRS. People who are self-employed, work for non-profit organizations and religious institutions will often be treated to a different set of standards. Consulting a legal professional who understands the ins and outs of tax laws is always recommended before filing tax returns or seeking an extension. They will be able to help you plan how to legally file the return that will have the best benefits for you as an individual. Tax law is complicated, and filing can be both time-consuming and stressful, so do not hesitate to seek professional help.