April 15, 2019, has come and gone—and with it, so has the deadline for filing your 2018 tax return. What happens if you missed that deadline?
If You Owe Taxes
If you owe the IRS money and you did not file your tax return or make a payment for taxes owed by April 15, then you will start to rack up more debt very quickly. The IRS starts to assess a “failure to file” penalty right away. This penalty is 5% of your outstanding tax debt every month that your debt remains unpaid. The penalty is capped at 25%, but that’s still a hefty sum that adds up quickly.
Keep in mind, this penalty only applies to filing—additional penalties may apply for failure to pay. Your best bet? Square up with the IRS as soon as possible and show them that you’re making an effort to bring your account into good standing.
If You Don’t Owe Taxes
If you did not owe the IRS any taxes, then not as much is at stake for non-filing. You simply won’t get any refund due until you file. The good news is that you have up to three years (until April 14, 2022) to file your return and claim your refund. After that, though, you can wave any money you were owed goodbye!
There are also many other important reasons to file your taxes, even if you don’t have a big refund. Filing is the only way to take advantage of many valuable tax credits. In addition, there are various situations in which you may be asked to provide your most recent tax return as proof of income throughout the year.
If you didn’t file your taxes and you’re not sure what your next step needs to be, reach out to your local tax team at Taxation Solutions, Inc. We’re your go-to tax resource in Cincinnati to help with back taxes owed and more. Call us today to set up an appointment or to get more information—we’re here to help!