Even though the tax filing deadline is on or around April 15 each year, sometimes we get busy and distracted and forget to file on time. Or, maybe you finished your taxes ahead of time and thought, "Let me file this return right now," put the envelope in the car and promptly forgot about it until you discovered it in the glove box in June. Not filing a tax return on time can be a pricey error on your part, but just how pricey depends on several factors, including if you owe money to the government.
If You Don't Owe Taxes
If you have zero tax liability, there is no penalty for filing your tax return late. However, you'll still want to file it if you received any kind of refund since the parties for whom you worked will have filed the appropriate forms about you with the IRS. So, if you received one or more 1099s or W2s, you'll still want to get your tax return to the IRS as soon as possible.
If the IRS owes you a refund for overpayment, there also is no penalty for not filing on time. However, you only have three years to file your return and still get your refund. After the three year period, the IRS is under no obligation to issue your refund.
If You Do Owe Taxes
The IRS has two penalties that might apply to your tax return. If you filed late, you'll pay a failure-to-file penalty. If you file 60 days or more after the filing date, the penalty is a minimum of $205 or 100 percent of your tax responsibility if the amount you owe is greater than $205. Otherwise, there could be a 5 percent penalty for each month your taxes aren't paid, up to 25 percent.
Whether you filed on time or not, you could also face a failure-to-pay penalty if you paid your tax bill late. The penalty for paying late is 0.5 percent of the unpaid taxes for each month up to 25 percent of the total unpaid taxes. For those who owe and missed the filing deadline, both penalties apply, but only the 5 percent per month penalty is assessed. It is important to note that the interest on taxes owed can add up quickly, so you should get your taxes paid as quickly as possible.
Possible Waivers of Penalties
In some cases, the IRS will waive the penalties, provided the taxpayer provides a legitimate excuse. Forgetting your return was in your glove box will likely not exempt you from the penalties, but being in the hospital or incarcerated in jail could. If you think you might have a qualifying exemption circumstance, you'll need to contact an IRS representative and make your case.
- IRS: Important Facts about Filing Late and Paying Penalties
- Forbes: You Mailed Your Tax Return; The IRS Didn't Receive It: Who's To Blame?
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K.A. Francis has been a freelance and small business owner for 20 years. She has been writing about personal finance and budgeting since 2008. She taught Accounting, Management, Marketing and Business Law at WV Business College and Belmont College and holds a BA and an MAED in Education and Training.