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Missed Tax Deadlines: What You Need to Know

By April 16, 2024Tax Strategy, Taxes

Missing a tax deadline can feel like a sinking ship and understanding the implications and knowing how to navigate the aftermath is key to staying afloat. Today, we’ll dive into the specifics of missed income tax deadlines, shedding light on penalties, extensions, and potential remedies.

 

Penalties for Missed Deadlines

 

Let’s break it down. When you miss an income tax deadline, you may face two separate penalties:

 

  1. Late Payment Penalty: The IRS charges half a percent per month on the unpaid amount, capping at 25% of the total owed. This penalty accrues until the outstanding taxes are paid.

 

  1. Late Filing Penalty: This penalty is more severe, at 5% per month, also capping at 25% of the total owed. It applies when you fail to file your return by the deadline, regardless of whether you owe taxes or not.

 

Filing an Extension

 

Filing for an extension can be a lifesaver, especially if you’re unable to meet the deadline. Remember, an extension grants you extra time to file your return, but it doesn’t extend the deadline for tax payments. Payments are still due on the original deadline, even if you file for an extension.

 

Refunds and Late Filings

 

If you’re owed a refund, the good news is that there are no late filing or payment penalties. However, it’s crucial to file your return promptly to claim your refund. Delaying filing can still lead to complications down the road, including potential IRS inquiries.

 

Seeking Penalty Abatements

 

In some cases, you may be able to request penalty abatements, seeking forgiveness for late filing or payment penalties. However, navigating the process can be complex, and DIY attempts may lead to further complications. It’s advisable to seek professional assistance when pursuing penalty abatements to ensure the best possible outcome.

 

The Bottom Line

 

When it comes to missed tax deadlines, ignorance is not bliss. Understanding the penalties, filing extensions when necessary, and seeking professional assistance can help mitigate the impact of missed deadlines. Remember, profit is a choice, and making informed decisions about your tax obligations is paramount to your financial well-being.

 

While missed tax deadlines can be stressful, they’re not insurmountable. By taking proactive steps and seeking appropriate guidance, you can navigate the aftermath with confidence and clarity. Stay informed, stay proactive, and remember, the key to financial success lies in making informed choices.

 

For more information, refer to the video below. It was made just for you!

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