What Happens If I Miss the Tax Deadline?
For 2018, tax season ends on April 17 instead of April 15. But with tax season quickly coming to a close, you might still be missing forms and other information. You could also just be too busy to get your taxes filed on time despite having a few extra days. So, the age-old question comes up: “What happens if I miss the deadline?”
First, don’t panic. You’re not the first, and will hardly be the last, person to miss the April deadline. IRS agents aren’t going to knock on your door uninvited just because you’re a couple days late with filing your taxes. While it’s always prudent to file for an extension as soon as you think that you won’t have your tax documents ready before the deadline, it can take a few days to process not barring the possibility of rejection if you didn’t fill it out correctly. Filing for extension too close to the deadline won’t necessary be failsafe when it comes to avoiding penalties.
If you didn’t file for a six-month extension in time, there are two IRS-approved exceptions for not filing your tax return on time. If you are a member of the military or naval forces and are stationed outside of the US or Puerto Rico on Tax Day, you will get an automatic two-month extension that gives you until June 18, 2018 to file your tax return late without getting penalized. If you are a civilian who is out of the country for business reasons, whether it is for your job or your own business, your primary residence needs to be outside of the United States as well as your main place of business. For government employees, you must also be living outside the United States with your post based internationally.
These are the only two exceptions that grant an automatic extension for being out of the country. Business trips and international conventions don’t count, personal trips like vacations also don’t count.
Late Filing Fees vs. Late Payment Fees
If you didn’t file for an extension in advance or just passed the deadline without filing, you will be assessed late filing fees also known as the failure-to-file penalty. Without the protection of an approved six-month extension, this penalty starts accruing on April 19. It is 5% of your unpaid balance for each full or partial month that your tax return is late. It won’t exceed 25% of your total unpaid taxes but it racks up fast and it’s why you should file a tax return as soon as possible if you couldn’t get an extension in time. Even if you can’t pay any of your balance immediately, preventing the late filing penalty will save a lot of money.
Late payment fees, also known as failure-to-pay penalties, are separate of the late filing fee. You won’t have to worry about them if you’re due a tax refund but if you owe taxes, but if you owe money then this penalty is 0.5% of your unpaid balance for each full or partial month from the tax filing deadline until you pay the tax in full. The penalty will never be more than 25% of your total unpaid balance. If you wait 60 days or longer to file your tax return after Tax Day without having either the automatic two-month extension or a valid six-month extension filed in advance, you will be assessed the smaller of $210 or 100% of your unpaid taxes at bare minimum in penalties alone.
In the event that you miss the deadline and weren’t able to file an extension, you should still file your tax return as soon as possible and pay as much of your balance as you can along with your tax return. At the very least, you want to file your tax return then figure out your payment options after the IRS now has your return in the system.
Rue & Associates offers tax preparation and resolutions year-round to help you solve your tax problems before they have a chance to become snowballing tax debt. Contact us today to speak to one of our friendly and professional tax law experts.