Even though death and taxes are the only true certainties in life, the tax day somehow always seems to sneak up on us. So what happens when the tax season comes to mind and you do not file anything?
That depends. If you already know that you will not have your taxes done by the tax day, you can request an extension. You can get another six months to submit federal taxes by completing a form and assessing (and paying) how much you owe for that year.
Even if you may receive an extension, you must pay your taxes on the regular due date: If you do not hand over at least an estimated amount to the IRS by April 15, there will be a fee of 0 , 5 percent of the tax you owe collected First place per month was not paid (up to 25 percent). If you ignore repeated notifications from the IRS, this percentage increases by 5 percent to 1
If you do not have to file an income tax return by mid-April. You will be fined – up to 25 percent of the amount you already owe for each overdue month. If you submit your returns more than two months late without a good excuse, you'll pay at least $ 135 in fines or the remainder of the tax you owe if the total is less than $ 135. (According to the IRS website: "The total penalty for omission and payment may be 47.5 percent [22.5 percent late filing and 25 percent late payment] of the tax due.")
If you expect a little, you'll find that this is usually worth your while Return or get an extension, even if you can not pay your taxes immediately. Turbotax explains it like this:
Example: Let's say you did not submit your return or an extension by April 15, and you still owe the IRS another $ 1,000.
Scenario 1: You submit an extension on or before April 15, and pay your $ 1,000 bill on April 25 (10 days late). Their sentence would be $ 5 (the 0.5 percent fine for late payments of $ 1,000), plus another dollar for interest.
Scenario 2: You have not submitted any extension, and you have submitted a file your return on April 25th (10 days late) along with your payment of $ 1000. Their sentence would be $ 50 (the 5 percent penalty for late filing from 5 percent to $ 1,000), plus another dollar for interest.
Scenario 3: You submit your return along with your claim five years later a $ 1000 payment. Your sentence would be around $ 534 (the maximum late filing penalty of 25 percent to $ 1,000 and a 5 percent daily markup unless the interest rate changes).
If you are because of your employer Do not owe taxes If you keep more than necessary and you need to get a tax refund, you have three years to raise your taxes before the IRS keeps the money. As long as you are up to April 2022, you will still get the money back. After these three years, the IRS will retain your entire reimbursement and will not be credited to the next year's tax bill.
Suppose you just do not want to pay your taxes (a crime, just to be clear). How long does it take for the IRS to come after you?
If your fines and taxes exceed $ 25,000, someone from the IRS will knock on your door. In 2016, the IRS investigated 206 people for failing to register their taxes on a regular basis and jailed 159 people for an average of three years. (Remember, it was the IRS that knocked out Al Capone.)
If you're a chronic non-filer and you do not submit your taxes to the IRS, the government will go ahead and assess what you do debt. Calculate what is called "replacement for return". This amount does not include any deductions that you may have been eligible for, so if you leave the taxes to the government, you will probably expect a more hefty bill.
And that's only at the federal level. While states differ in how they deal with people who fail to file their taxes, they also suggest fines and interest on late returns and payments. In some states, even a federal tax is refunded to pay federal taxes. However, if you are approved for a federal tax increase, you will automatically receive an additional income of six months on your personal income tax in many states.
Lesson: If you have the chance to report late this year, ask for an extension to ASAP.
A version of this story was first published in 2016.