The penalty for not filing your return is usually 5% of the taxes you owe for each month or partial month in which your return is late. This penalty also reaches a maximum of 25% of unpaid taxes. You risk losing your refund if you don't file your return. If you are due a refund for estimated withholding or taxes, you must file your return to request it within 3 years of the due date of the return.
The same rule applies to the right to apply for tax credits, such as the earned income credit. Whether you file your taxes or not, you owe money to the government and the government expects you to be paid on time. That means that not paying your taxes on time can also result in penalties. Whether you file your taxes or not, the IRS will send you a notice of what you owe.
If you don't pay that amount before the due date of April 18, daily and monthly penalties will apply. If you have difficulty preparing your return, you may be eligible for help through the Voluntary Income Tax Assistance (VITA) or Tax Advice for the Elderly (TCE) programs. There is a 10-year statute of limitations for unpaid taxes, which means that, in most cases, the IRS cannot process taxes due that go back more than a decade. If you need wage and income information to help you prepare an overdue return, complete Form 4506-T, Request for Transcript of the Tax Return and check the box on line 8.If you owe taxes and don't file or file them after the deadline, the IRS may apply a penalty known as a late filing penalty or a penalty for not filing the return.
Not being able to submit your application on time can happen for a variety of reasons, from simple forgetfulness to unexpected emergencies. The late filing penalty affects people who don't turn in their Form 1040 and other important tax documents on time. The IRS may also choose to remit your outstanding tax payment to a private collection agency, which is likely to be much more aggressive in recovering the funds. If you have any income, the agency can basically use it to file a tax return on your behalf.
If you need information from a previous year's tax return, use Get Transcript to request a transcript of the return or account. Every month you don't pay your taxes in full, the IRS will impose a penalty of 0.5 percent of your total tax liability. If you fall into this category and you don't owe taxes to the government or are owed a tax refund, you won't be imposed any penalty for not filing your taxes. If the IRS files a replacement return, it's best for you to file your own tax return to take advantage of the exemptions, credits, and deductions you're entitled to receive.
If you have to file a return and owe a balance, but you can't pay all of the taxes due on your return, the IRS may be able to help you set up a payment agreement. This means that if you don't file your taxes before April 18, you could start facing penalties because you owe money to the government.