So you missed your federal tax filing deadline. Maybe you had a good reason, a personal or family emergency for example. Or maybe you just plain forgot. Whatever the reason for failing to meet the deadline, you now have to deal with the consequences. Here’s what to do next and why there may be hope for some relief.

Can I File an Extension?

Unfortunately, no. Once you’ve missed the IRS deadline to file for an extension, you can’t do it retroactively. You just have to take a deep breath and move ahead. The good news is that you can still file your return.

What If I Don’t Owe Any Taxes?

If you don’t owe any taxes, then you’re in luck. The IRS wants you to file but isn’t in much of a hurry for you to do so. In the event that you’re owed a refund, the IRS is happy to hold onto your money, interest-free. You have up to three years to file a return and get your refund. After that, the money goes into the U.S. Treasury. Note: The IRS may still withhold your refund if you didn’t file in a prior year and the IRS believes you may owe tax on an unfiled return.

What If I Owe Taxes?

Here’s where it gets a little painful. If you haven’t filed a return or an extension and you owe taxes, then some pretty stiff penalties and interest kick in. First there’s a non-payment penalty of one-half percent per month on the tax you owe. Then there’s the big one – a 4.5 percent per month non-filing penalty on the outstanding tax.

These two penalties accumulate for five months until they reach 25 percent of the unpaid amount at the time the tax was due. After that, the non-filing penalty stops, but the IRS continues to assess the non-payment penalty and interest. The maximum total penalty for failure to file and pay is 47.5 percent (22.5 percent late filing and 25 percent late payment) of the tax.

Can I Get Any Relief?

Filing your taxes immediately can help to minimize these penalties. If you owe but can’t pay in full, you have several options for meeting your tax obligation. You can request an installment agreement if you owe $50,000 or less in combined tax, penalties and interest. Instead of paying everything you owe up front, an installment agreement allows you to make payments over time. You may also be eligible for other relief from penalties if you meet certain conditions, such as reasonable cause (fire, natural disaster, illness, death in the family), first-time penalty abatement or incorrect written advice from the IRS.

Can My Accountant Help?

An accountant can help you prepare your tax forms, including filing late or amended tax returns and seeking relief. Make an appointment as early as possible, and give your accountant plenty of time to properly prepare your returns.

SOURCE1800 Accountant
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