No matter how organized you are, there are times when we miss tax filing deadline of April 15th. This can be if you missed it because of other important tasks or if you are uncertain of the process of filing taxes. It is also quite common that you needed more time to arrange for the amount of taxes you owe, thereby leading to delays and thus missing the deadline. There can be a multitude of reasons for missing the tax filing deadline, so don’t think that it is the end of the world. However if you missed the deadline, don’t think that you don’t need to file anymore. Not filing your taxes at all has unfavorable consequences, so you should weigh your options to fix the situation.
1. File ASAP
Each date after the tax filing deadline can accrue interest charges if the taxes aren’t filed. File as soon as possible to avoid these piling up penalties and interest charges. Work on your tax documents and do the calculations to verify if you owe any money to the Internal Revenue Services (IRS).
There is no penalty or fee to file late if you are getting tax refund. But you would want to file sooner to get the refund faster.
If you owe money to the IRS, there is a late tax filing penalty. This penalty is much higher if you don’t file at all, especially if you owe money. This is borrowing money from the government of the United States of America and IRS will charge you interest charge for every single day you delay in paying your tax dollars. However, if you attach a cover letter in your tax filing documents stating a good reason for filing after the tax filing deadline, the IRS might waive the late filing fee and you won’t have to pay any penalty; you will be only paying the amount that you owe. So try to file as soon as possible.
2. File using E-file
E-file can be used to file easily and without taking much time. If you have already passed the tax filing deadline, you don’t want to cause further delays by mailing the documents using postal services. If it takes 5 days for your documents to reach the IRS, you will need to pay interest charges for those 5 days also. The E-file can be used to file to taxes until the extension deadline of October 15th. Using E-file, your tax related information reaches the IRS instantaneously and you are able to access your status with all the details you submitted all the time. If you are expecting a refund, usually it takes less than 21 days for your refund to reach your bank account if you choose the direct deposit option to receive the refund.
3. Set-up a payment plan
As mentioned in the introductory paragraph, sometimes you miss the tax filing deadline if you owe tax money because you are unable to pay. However, there are better options for this scenario also as compared to not filing at all.
If you delay in filing and don’t file at all, you are not fixing or dodging any problem; rather you are increasing the problem. With every day after the tax filing deadline, the amount of money you owe to the IRS keep increasing in addition to a standard penalty for late filing. A better and more strategic option is to file for tax documents at the earliest and pay as much as you can afford to at that time. Then, set up an installment payment plan.
The IRS offers great installment plans allowing you to make more manageable payments. These plans are available to all the taxpayers as long as the total amount you owe to the IRS including your taxes, penalties and interests is less than $50,000. Also, the interest charges on these IRS installment plans are quite competitive and are lesser than the interest rate charged by IRS when you delay the tax filing, and the interest rate charged by the credit card companies or payday loans if you borrow money from them to pay your taxes.
Setting up an online Installment payment plan is quite easy. You go to the IRS website at www.irs.gov and in the search box, type “online payment agreement application”. It will give you form that you need to fill and submit with all the details. If not online, you can also complete and mail the Form 9465 Installment Agreement Request form.
Summary
The IRS wants you to file the tax return; this is more important if you owe money. If you miss the tax filing deadline, the delays in filing the taxes will add up to the amount of money you will eventually need to pay.
If you don’t owe any money and would be getting tax refund, then delaying in the filing of taxes will delay the processing of your refund.
So if you have missed the tax filing deadline, don’t delay more; file your taxes today.