How To Guide For: Understanding What Happens If You Don't File Your Taxes
A tax return is a form on which a taxpayer makes an annual statement of income and personal circumstances, used by the tax authorities to assess liability for tax. If you do not file your return, you pay the failure-to-file penalty. If you file and owe money and do not pay your tax bill, you pay the failure-to-pay penalty. The IRS charges penalties individually for non-filing of a tax return and non-payment of taxes. The failure-to-file penalty is 5 percent of the unpaid taxes. The failure-to-pay penalty is 0.5 percent of the unpaid taxes. Both these penalties are charged each month until the taxpayer regains compliance. However there is an exception, if you're owed a refund, you won't be charged a late-filing fee at all. But you won’t get that refund unless you file a return. Some people believe that if they can't pay they can just get an extension and that will solve their problem. But an extension is an extension to file, not an extension to pay taxes. Getting an extension only avoids the failure-to-file penalty, not the failure-to-pay penalty. So please make sure to get your tax return to the IRS by the April 15 deadline. Even if you cannot pay the entire tax bill you can pay as much as you can. Another option if you can't afford to pay your entire tax bill is you can contact the IRS to see if you qualify for an installment agreement. An installment agreement allows you to pay your taxes over time while avoiding garnishments, levies or other collection actions. You'll still owe penalties and interest for paying your taxes late, but it can help make the payments more affordable. The minimum monthly payment for your plan depends on how much you owe. I found myself in this situation last year and I was able to get an installment agreement from the IRS for a few months and I was able to pay off my tax bill before the end of my installment agreement period. To get more information on what happens if you don't file your taxes click the pictures below to read the articles.