Every year, most U.S. citizens must file income tax returns. Federal and state authorities set forth specific laws and regulations pertaining to income tax reporting. The Internal Revenue Service (IRS) is known for being particularly strict when it comes to enforcing tax laws, such as the requirement to file a timely return. Failing to comply with the rules enforced by the IRS could result in severe consequences. The best way to avoid problems with the IRS is to file complete and accurate tax returns before the relevant deadlines pass – for instance, this year’s April 17, 2018 deadline to file a federal income tax return. But what happens if you miss the tax filing deadline? And what should you do after the deadline has passed? Our Roseville tax attorneys address these questions and provide further information on what to do if you miss the deadline to file an income tax return in California.
What is the Deadline and Extended Due Date to File a Tax Return?
If you have missed this year’s April 17 tax filing due date, there may still be remedies available. For instance, the IRS offers a tax filing extension if you missed the initial deadline. Individuals can file a tax form known as the Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, or Form 4868, which is generally due when your tax return is due.
Businesses would need to file a different tax form than individuals. This version for corporations is known as the Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, or Form 7004.
Keep in mind the filing extensions do not extend the time you have to pay your taxes. The extension only grants an extended opportunity to file your income tax return – subject to any financial penalties (and interest) imposed by the IRS.
If you obtained the deadline extension, you have until October 15, 2018 to file your return. If you did not obtain an extension, you may face costly penalties, which are discussed below. Working with an experienced Roseville tax lawyer can help mitigate the penalties you face.
Penalties for Failing to File a Tax Return
There are different penalties for failing to file taxes and failing to pay taxes, the former being more severe. According to the IRS, an individual who fails to file their income tax return on time will face a penalty of 5% of the delinquent taxes “for each month or part of a month that a tax return is late.” This penalty for unfiled tax returns can reach a maximum of 25% of the unpaid income tax.
The penalty for failing to pay is smaller, but can still add up quickly. The penalty for failure to pay taxes is 0.5% of the unpaid taxes, which is again applied toward each month (or partial month) such taxes went unpaid.
Additionally, if you file your taxes more than 60 days after the April filing date or extended October deadline, you may be charged a minimum $135 fee, or the total amount of your owed taxes.
What to Do if You Missed the Tax Deadline
If you did not file your federal income tax return on time, you may be required to pay the penalties discussed above. If you are currently facing this situation, you should talk to a knowledgeable attorney about the right approach to tax preparation services that can help you minimize penalties while becoming compliant with the law. The IRS recommends taking the following steps if you failed to file your return on time:
- File your tax return as soon as you can, which will help to reduce the amount of interest that you ultimately owe.
- Work with an attorney to see if the IRS will agree to lower any of your penalties. As the IRS notes, while there is typically no waiver for penalties and interest, there are some cases where “the IRS will consider a reduction of these penalties if you can show a reasonable cause for being late.”
- Consider entering an IRS installment agreement to help make your tax payments easier and more manageable. Our tax resolution attorneys may be able to help you make an Offer in Compromise (OIC), or find other financial solutions.
Remember, if you requested a timely extension, you have until October 15, 2018 to file your return. If you miss the extended October deadline, you are at risk of incurring expensive penalties, but may be able to reduce the resulting fines and fees by taking strategic action.
Roseville, CA Tax Attorneys Providing Return Preparation Services
As you can see, it is essential to keep your financial records organized and up to date. By preparing in advance, you give yourself more opportunities to file a timely income tax return with the IRS. However, even if you have missed the deadline, there may still be steps you can take to make the payment process simpler and less financially burdensome. To discuss unfiled tax returns, unpaid tax liabilities, or other tax issues with an experienced attorney in a free consultation, contact NewPoint Law Group online, or call our law offices at (800) 358-0305 today.