It’s Not Too Late! File Now!

You haven’t filed your federal income tax return for this year or previous years. Regardless of your reason for not filing a required return, file your tax return as soon as possible.  Bad things can happen if you let this go.

If your return wasn’t filed by the due date (April15 )(including extensions of time to file – October 15):

• You may be subject to the failure to file penalty, unless you have reasonable cause for your failure to file timely.
• Tax not paid in full by the original due date of the return (regardless of extensions of time to file) may also result in the failure to pay penalty, unless you have reasonable cause for your failure to pay timely. It is possible to avoid this if you apply for an extension of time for payment of tax due to undue hardship, IRS Form 1127.
• Interest is charged on taxes not paid by the due date, even if you have an extension of time to file, and is also charged on penalties. If you let this go, interest will continue to compound, increasing your tax liability.
• There’s no penalty for failure to file if you’re due a refund. However, you risk losing a refund altogether if you file a return or otherwise claim a refund after the statute of limitations has expired. An original return claiming a refund must be filed within 3 years of its due date for a refund to be allowed in most instances. After the expiration of the three-year period, the refund statute prevents the issuance of a refund check and the application of any credits, including over-payments of estimated or withholding taxes, to other tax years that are underpaid. However, the statute of limitations for the IRS to assess and collect any outstanding balances doesn’t start until a return has been filed. In other words, there’s no statute of limitations for assessing and collecting the tax if no return has been filed.

If you’re uncertain about the steps to take to file outstanding tax returns, we can help you. If you have any tax or personal finance questions that aren’t listed here, hit us up in the comments below or send us a note!