Late Tax Filing
Most of us pay too much to the IRS, so we don’t need to give them any more than we have to – that is, unless you like paying extra money. And most people don’t, which is why you need to pay close attention to the information presented here.
If you are guilty of late tax filing, you will most likely fit into one of these three categories
- You file on time, but you didn’t pay the full balance. This usually results in a late-filing penalty.
- You’re filing late because of an economic hardship. If that’s the case, file Form 1127 with the IRS to ask for an extension. The penalty is usually 0.5% of the unpaid balance, which is calculated every month. But the maximum amount that can be incurred is 25% of the unpaid balance. If you file your return within ten days of receiving a levy warning, the penalty goes up to 1%. These fees can add up, but they can be avoided if reasonable cause can be established.
- You haven’t filed or paid your taxes. This can result in two types of penalties – a late-filing fee and a late-payment penalty. It can add up to 5% of the unpaid balance, which is calculated every month. They are incurred for the first five months of it being past due, but an extra 0.5% can incur every month and can go up to 25% if it’s too far past due. However, it can be avoided if you pay the balance or make an agreement with the IRS.
If you are more than 60 days late in filing your return, you will have to pay a fine of $135 or 100% of the unpaid balance. Bear in mind that late tax filing is only a problem if you owe money. If you’re getting a refund, you have up to three years to file a return before the IRS accepts your “donation.”
Common Questions About Late Tax Filing
Tax penalties can add up fast, and dealing with the IRS can be intimidating. So, you need to be proactive and face the problems head-on. The penalties for late tax filing can be ten times higher than late-payment penalties, so it’s in your best interest to work it out with the IRS.
The best way to avoid a problem is to understand how the system works. Here are some common questions people have about late tax filing.
How should I send my tax return to the IRS?
If you file before April 15, the IRS recommends that you file online, but you can also go through a trained professional. Just make sure the person you hire is above board, because there are many uncertified accountants that have been showing up since the recent economic downfall.
How much does it cost to file online?
There is no extra charge to file online, but you might want to seek the help of a tax professional.
What happens if I can’t file before April 15?
If you need more time, you can avoid paying any late-filing penalties if you file Form 4868, which allows you to ask for an extension.
Can I file Form 4868 online?
Yes – Form 4868 can be filed online, but it can also be submitted through the mail.
How do I know if I’ve been granted an extension?
If Form 4868 has been filled out and sent to the IRS, taxpayers are granted an automatic extension.
How hard is it to fill out Form 4868?
It’s not hard to fill out Form 4868. It’s short, and it only asks for some basic contact information. Just remember that filing an extension means that you’re agreeing to pay this year’s taxes in full. So, you may want to speak to a tax professional before you file.
Experts in Late Tax Filing
If you want to learn more about late tax filing, be sure to talk to someone at GLG Accounting. Our CPA’s will be able to advise you on the proper way to proceed, and they can tell you how to avoid paying extra penalties.
Feel free to get in touch with us to schedule your FREE consultation!