Filing Your Taxes Late, is it Worth it?

With only 2 days until your taxes must be completed and submitted, there is a good chance that you might not be able to get around to filing on time. Don’t worry; you do have some options here. But keep in mind that filing your taxes late should not be one of those options. Your accountant in Billings, Montana looks at what happens if you file late, and what you should do to avoid filing late.

Filing your Taxes Late

If you absolutely must file your taxes past the April 15^th deadline, then you should file them as soon as you can to avoid racking up late fees, interest, and other penalties. The IRS wants your tax return, and they will accept late tax returns no matter when those returns come in. Keep in mind that most people get a tax refund, if you simply don’t do your taxes, you risk forfeiting that refund.

The good news is that if you are eligible to receive a tax refund, there is no penalty for filing your taxes late. But the longer you wait without claiming that refund, the longer the government gets your money and doesn’t owe you any interest; your 2014 taxes must be filed by April 15^th 2018 or that refund is forfeited to the US Treasury.

The bad news is if you owe money on your taxes. Now there are two different fees here, a failure-to-file fee and a failure-to-pay fee. They are vastly different.

Let’s suppose that you owe $1,000 on your taxes.

If you don’t file your taxes on time, you are going to be hit with a failure-to-file fee. This fee is 5% of the amount that you owe on your taxes, every single month. So in our scenario if you file 1 day late, or 30 days late, you owe an additional $50. That amount caps off at 25%, but you will still be hit with the failure-to-pay penalty.

If you file your taxes, but you can’t afford to pay what you owe (and if you didn’t set up a payment plan) the IRS will still ding you. This ding isn’t nearly as bad as simply not filing though and comes in at a mere .5% per month interest. So if you miss paying by up to a month, you owe an additional $5 for our situation. This amount will cap off at 22.5%.

There are some other increases, maximums, and scenarios and those will vary depending on your situation, but the bottom line is this: if you owe money, and you fail to file your taxes, you can expect to pay an additional 5% each month until things are paid off.

Don’t File Your Taxes Late

You still have plenty of time to file your taxes if you do them yourself (TurboTax offers a free online program if you meet the qualifications), or you can always file an extension. Learn more about how to file an extension on your tax return.

Give us a call at 406-894-2050  to see if your accountant in Billings, Montana can still squeeze you in before the deadline (chances are slim, but we can help file that extension).

Practical Taxes is a full service accounting firm in Billings, Montana. Like all accountants our crunch time is the first few months of the year, but after tax season is over we don’t close up shop. Throughout the year we are available for business consulting, payroll services, and multiple other accounting needs.