This story is partCNET’s coverage of the best tax software and everything you need to file quickly, accurately and on time.
Yesterday was thefor almost everyone in the United States. (Massachusetts and Maine, you still have today to finish.) If you haven’t or have a paper return stamped by midnight on April 18, your taxes are now technically overdue.
There are many reasons why people might not be able to complete and file their tax returns by the deadline: missing tax information, medical emergencies, family issues, unplanned trips…you know, life.
Yes, you should have filed a. But what now that your tax return is overdue? Whether you owe taxes or are expecting a the answer is simple: complete and file your 2021 tax return as soon as possible.
However, if you owe money, your situation becomes more urgent. The longer you wait to file your tax return and show the IRS that you intend to pay what you owe, the more penalties and interest can accrue.
Read on to learn more about how to handle a late tax payment, including information about penalties, interest, and payment plans. To find out more, find theand learn to or mailbox after you do.
What if I’m late and expecting a 2021 tax refund?
If you are waiting for money from the IRS for your 2021 tax return, there are no late filing penalties. In fact, you have three years to file your 2021 tax return before the IRS hands over your tax refund to the Treasury and your money is gone forever.
Your tax refund can beby filing late, but you should still expect to receive your money in four to six weeks.
You could bemoney the IRS owes you, and the longer you wait to file your taxes, the more you lose. Whether you use your tax refund to repay a , start an emergency fund, make investments, or even just treat yourself to a nice dinner or vacation (depending on your refund amount), you want your money sooner rather than later. Letting the IRS keep your tax refund longer only robs you of potential interest and purchasing power.
What if I missed the deadline and owe money on my taxes?
If you missed the tax deadline, didn’t file an extension, and owe taxes, you need to hurry and complete your return as soon as possible and file it. filing penalties and late penalties.
What are the fees and penalties for late tax returns?
There are two basic penalties the IRS charges for late filing taxes when you owe money: a failure to file penalty and a failure to pay penalty. On top of that, you will also pay interest on the amount you owe.
the penalty for failure to produce hurts the most. This is usually 5% of the amount you owe for each month or part of a month your return is late, with a maximum penalty of 25%. If your return is more than 60 days late, the minimum penalty is $435 or the balance of your taxes owing, if less.
the penalty for non-payment will also cost you some money, but not as much – a big reason to file an extension in time even if you can’t afford anything. This penalty is generally calculated at 0.5% of any tax owing that is not paid by the due date. The IRS re-charges the penalty for each month or part of a month that your payment is late, with a maximum total penalty of 25%.
The IRS also charges interest on late taxes. Determined by adding 3% to the federal short-term interest rate, the IRS interest rate is currently 4%. This rate is adjusted quarterly and interest is compounded Daily.
Can I file an extension after the tax deadline?
Unfortunately no. Tax extensions give taxpayers an extra six months to complete their tax returns, but they must be filed by the tax deadline. Taxpayers filing extensions must also include the estimated amount of money they owe using IRS Form 1040-ES.can also quickly calculate your estimated taxes.
If your deadline has passed, it is too late to file an extension.
What happens if I filed an extension on time?
Good work. You have until October 15, 2022 to file your tax return if you filed a tax extension before the April 18 deadline. As long as you’ve paid an estimated amount close to what you owe, you won’t be subject to fines or penalties if you file your return and pay any outstanding taxes before October 15.
If you have not paid enough money with your tax extension, you may be subject to the late payment penalty. The IRS expects your estimated payment to be at least 90% of your total tax payable. The agency can charge a penalty of 0.5% per month on the amount of unpaid taxes if you paid less than that, so you should still complete your tax return and file it as soon as possible.
What if I can’t afford to pay the taxes I owe?
Paying taxes that you don’t have the money to pay can be incredibly stressful. However, there are steps you can take now that will ease both your financial and psychological burdens.
Consider an IRS payment plan. If you can pay off your tax debt within 180 days, the IRS will allow you to apply for a short-term payment plan that costs nothing, although you will continue to accrue penalties and interest until your debt is paid off. reimbursed. It’s easy to apply online or at a local IRS office.
If you need more than 180 days, you can apply for a long-term payment plan that costs $31 for automatic monthly bank payments by direct debit or $130 for direct debit payments. Low-income taxpayers — those whose adjusted gross income is at or below 250% of the federal poverty guidelines — can waive the fee for the direct debit plan or pay $43 for the non-direct debit plan.
You might consider other borrowing options besides the IRS. If your tax liability is not too high, you can use ato pay your taxes, assuming you can repay that debt before the introductory period expires. For larger tax debts, you might consider a although your rate is usually higher than the 4% currently charged by the IRS.