Some time ago, you might have thought to yourself that the tax deadline is still some ways away, so you put it off. However, now you have seen that the tax deadline has come and passed.
However, now that the tax deadline has passed, you need to do your best to get them sorted out as soon as possible. There may be some problems popping up that you would rather not face.
But worry not. This article will talk about the easy steps you can take to get your taxes sorted out even after the deadline has passed.
Nobody wants to get into problems with the IRS. Don’t panic if you missed this year’s filing deadline; instead, act quickly.
Unless they live in Maine or Massachusetts, where citizens have until April 19 to file due to the Patriots’ Day state holiday, the bulk of taxpayers have until April 18 to file their 2023 tax return. Taxpayers who seek an extension will have until Oct. 17 to complete their returns, though they should have estimated and paid whatever taxes they owe already.
“As with everything IRS, the money you owe them is very different from the money they owe you,” explains Rob Cordasco, CPA, founder of accounting company Cordasco & Company.
However, if you have an outstanding tax liability, you should weigh all of your options. The deadline to request an extension with the IRS was also April 18.
Here’s what you should do if you missed the tax deadline, whether you’re due a refund or owe money.
What to Do After the Tax Deadline?
If the tax deadline has passed, there are still steps you can take to sort out your taxes. Here are some easy steps you can follow after the tax deadline:
1. File For A Tax Extension
One of the most straightforward steps you can take after the tax deadline is to file an extension. Tax extensions give you six or more months to get your paperwork sorted out and filed correctly.
To be able to do this, all you need to do is fill out Form 4868, which gives a basic overview of why you are filing for an extension.
The IRS will then decide if they want any further information from you before they grant the request—they often process these requests fairly quickly, so try to file one immediately.
2. Make Sure to Have All Your Paperwork Ready
Having all the things you need to file an extension at the ready means you would not waste any more time trying to get your taxes done.
Checking if everything is ready will also make sure the papers you mail are complete and accurate.
For example, while paystub generator is a valuable tool for entrepreneurs, they do not work well when you file for returns – so make sure you have the correct papers on hand.
It would be counterproductive to waste more time if the tax deadline had already passed.
If you don’t pay your tax bill on time, you’ll face two major fines and fees: the failure-to-file penalty and the failure-to-pay penalty. Both begin immediately on April 19, and they can quickly build up, greatly increasing your tax liability.
- This is how they work:
- Failure to file: This penalty is worth 5% of the unpaid taxes, increasing by 5% each month up to a maximum of 25%. In other words, the penalty is capped at five months late. The minimum penalty for filing your tax return more than 60 days late is $435.
- Failure to pay: This fee is equal to 0.5 percent of your tax total for each month the tax is delinquent. If you do not pay your tax within 10 days of receiving notification from the IRS, the penalty will increase by 1% every month. The penalty will not exceed 25% of your unpaid taxes.
3. Immediately File A Late Tax Return
If you have a tax refund that you are due to collect from the IRS, then you are in luck.
Fortunately for you, the IRS does not apply penalties to individuals who have a sitting tax refund available. So if the tax deadline has passed and you have a refund due, you can file a late return without facing penalties.
This may save you the headache of going through different kinds of paperwork trying to prevent penalties that you would not have faced either way.
Try to file a return as soon as possible so you can pay the returns you owe without gaining additional penalties or interest in the future.
If the calendar has moved past April 18 and you missed the tax deadline, you should file immediately, regardless of whether you owe money.
That’s because filing your tax return is your only chance to reclaim any money you overpaid to the IRS throughout the year, as well as any credits for which you qualify.
To emphasize the need for filing, Congress extended many of these tax advantages only for the 2021 tax year. For example, millions of U.S. households were eligible for up to $1,600 or $1,000 in additional child tax credit payments, as well as up to $5,900 to assist reimburse any money spent on child care during the year.
4. Try to Apply for an Installment Agreement
Maybe you missed the tax deadline because you have no means of paying your taxes currently.
If that is the case, then you can get yourself more time to settle your taxes through an installment agreement. This lets you pay off your balance through different chunks of payments over time.
However, one consideration for this is that the IRS must first approve your application—so this may not be an option for everyone.
5. Check Your Balance
You should also make sure that you know your balance first. It would be pointless trying to settle all your taxes without you knowing how much you actually owe.
So, try to add up all your tax returns by either generating invoices or collating similar paperwork, or use an electronic tax filing application to see your tax balance. There is also the option of using the IRS’s online service where you can see your balance online.
Many Americans may skip filing taxes because they are unable to pay their obligation.
However, if cost is an issue, experts advise you to file as soon as possible. You’ll be able to set up an installment plan with the IRS, which will help you limit the number of fines and taxes you face.
The IRS adds that if you have an approved payment plan even if you miss the tax deadline, the failure-to-pay penalty is reduced to 0.25 percent each month of your payment plan.
Many Americans may choose not to file their taxes because they are unable to meet their obligations.
However, if money is an issue, experts recommend filing as soon as feasible. You’ll be able to set up an installment plan with the IRS, which will allow you to reduce the number of fines and taxes you have to pay.
If you have an approved payment plan, even if you miss the tax deadline, the failure-to-pay penalty is reduced to 0.25 percent for each month of your payment plan, according to the IRS.
The Benefits of Paying Taxes on Time
When you pay your taxes on time, there are lots of benefits. One of these benefits is that it will cost you less money down the line.
Tax penalties can add up and may even be worse than what they would have been if you had just paid them when due without waiting for a deadline to pass. Paying your taxes on time can help minimize added interests and penalties. No one likes paying more than what they have to.
Another benefit is that paying taxes on time can help save on additional returns you can get in the future. This is because when you file your taxes late, your saved returns are the first source of money that the government uses to pay the amount you owe.
One last thing to remember is that paying taxes on time can help get you a better credit. If you do not pay your taxes on time, the IRS may file a tax lien on you—this is essentially a legal action that says you have not paid your taxes on time. This can reflect poorly on your credit score, possibly making it harder to access financial tools later on.
Final Thoughts: Easy Steps To Take After The Tax Deadline
Taxes are often thought of as a hassle. However, they become more of a hassle once the tax deadline has passed. But, by using the steps we have provided above, you should be able to navigate through a similar situation—if you ever find yourself in one.
