The tax filing deadline came and went the second time. The April 17 deadline got extended to April 18 midnight after the official website of Internal Revenue Service (IRS) crashed. Even then many people could not reach the new deadline. It has been estimated by the IRS that about 11.6 million people have not met deadlines, as per the extension requests. Even President Donald Trump made one.
Missing deadlines is quite common. However, a few things must be done to avoid crippling penalties. The first is that if you asked for an extension, the next deadline is October 15 to file taxes. Do remember that extension to file is not an extension to pay. You must pay what you owe by the deadline. A late fee can be avoided if you do this.
However, if you did not file for an extension, no penalties are imposed for late filing in-case a refund is owed to you. No late payment penalties or interest is applicable in such a case. The filing must be done as soon as possible so that the IRS does not keep the money. This is important as, if the taxpayer waits in excess of three years for the matter of filing, the refund will be kept by the IRS taking advantage of the statute of limitations.
This scene varies if you did not file an extension but you also owe money to the IRS. If this is the case, you will be subjected to a failure-to-file penalty. The latter may cost up to five percent of tax bill every month it goes unpaid post-deadline. It may reach 25 percent of the amount you owe. If you do not pay the bill, your credit score gets damaged. A criminal prosecution case could be made against you. It is important that you file as fast as you can, even if you cannot pay.
It may be possible for you to get a repayment plan. You can apply to a full payment agreement if you can pay the complete bill within a span of 120 days. This will permit you to make a number of monthly payments so that the debt is chipped away. An installment agreement can be made for the bigger bills. You will have more time than the standard 120 days to pay off debts. The list of plan benefits includes the avoidance of accruing extra interest and penalties.