How To Pay Back Taxes After Missing a Deadline?
Think about it. The last time you owed money for something — a dinner at a restaurant, perhaps — did you wait to pay until the next tax season? Of course not. You spend what was due as soon as possible. Why? Because you knew that if you waited too long, it would cost you more in late fees and interest charges.
If the IRS tax problem stresses you out, you are not alone. Everyone gets a little anxious about filing a return. And for most people, tax time is a reminder that there are other things they need to deal with, like loans and retirement accounts.
Filing taxes also means spending money. Whether you pay someone to prepare your taxes (or do it for free through the IRS Free File program), you will be spending money. Chances are, though, you will get some of your money back from the government.
When you missed the tax deadline but are due for a refund. There is no penalty.
Interesting, isn’t it?
So you may be thinking,
I was late filing my taxes. Do I need to file anything else?
If you missed the tax deadline, you have more time to file than you think.
You should still submit your taxes.
Unless your income was below the IRS filing threshold of $12,400 for single filers and $24,800 for married filers in 2020. You should still file your taxes if you had federal taxes deducted or are eligible for a refundable tax credit such as the Earned Income Tax Credit, as you may be due a refund. The IRS claims that unclaimed refunds.
If you have fallen behind on your taxes, you can arrange for a tax relief service to pay them back. Tax relief services will allow you to avoid severe penalties and fees.
Where do you start?
Figure out if you have got a balance.
Examine your most recent tax return to see whether you have a balance outstanding. The amount you owe is the difference between what you paid last year and what you owe this year. If you send money, keep track of how much you gave and when you sent it. You may make additional payments in the next year, so keep track of each one separately.
Use Where is My Return?
Using the, where is my return function on the IRS website and the IRS2Go mobile app, you may receive quick answers concerning your refund. All you require is your Social Security number, your tax filing status, and the precise amount of your tax refund.
What happened to my refund?
The site gets updated once every 24 hours at the most. You do not need to check the status more frequently because it happens overnight.
What if you owe tax?
If you owe taxes, you may check your balance, pay using IRS Direct Pay, a debit or credit card, or arrange for a payment plan, such as an installment agreement, online. You must first identify your identity through the Secure Access process before you may access your tax account online.
On IRS.gov/payments, you may find a variety of different electronic payment choices. They are safe to use. When you pay electronically, you will get instant confirmation of your payment. You can also receive email notifications about your payments via Direct Pay or EFTPS.
Tax Relief service for your help
- File for an extension: You get more time to file but not more time to pay if you get an extension. When you owe taxes when you file your return after filing an extension, you may be required to pay penalties and interest on the amount owed.
- Installment arrangement system: IRS tax problem can be overwhelming. You can apply an installment arrangement if you need extra time to pay your taxes. The IRS Online Payment Agreement tool is the most comfortable tax relief service. Immediately after completing the online procedure, you will get a notification.
What is the point of requesting an extension?
An extension will allow you to take advantage of any rapid changes to tax law after the filing deadline without having to file an amendment, which will require more time and money. Furthermore, some tax specialists believe that seeking an extension may reduce your chances of getting audited since IRS examiners are required to fulfill quotas and will aim to do so early in the year. While the IRS does not reveal how it chooses which returns to audit, the sooner a return is submitted, the longer it will be in the system and therefore be vulnerable to scrutiny.
Filing an extension extends the time for filing your taxes and protects you from fines. Penalties for late filing might add up to 5% of the amount owed with your return for each month that you are late.
Will you be charged fines and interest if you owe money?
Unfortunately, you may be subject to three distinct penalties for unpaid amounts on late tax returns:
- Penalty for failure to file
- Penalty for failure to pay
You can avoid paying interest and penalties on taxes if you pay them as soon as possible after missing the deadline.
Late payment penalties are generally 0.5% of the amount due for each month or part of a month that your payment is late if you follow a monthly payment schedule or 0.5% per month (0.5% if you follow a quarterly payment schedule). Penalties up to 25% are possible.
Even if you owe money, you should file to avoid this penalty. You may also be qualified for alternative payment plans and choices, such as an installment arrangement.
Will I still have to pay fines if I have a tough year?
With everything that has happened this year, and you are anxious about the IRS tax problem. If you can demonstrate to the IRS that your failure to file on time was due to reasonable cause, you may not have to pay penalties.
In certain situations, the IRS may also provide tax relief services in the form of extensions to make a tax payment or file your taxes if you were a victim of a federally declared natural disaster. The IRS just stated that Hurricane Ida sufferers got their tax deadlines extended.
Hopefully, this has calmed your nerves and brought you closer to submitting your taxes. Just because you missed the deadline for filing your taxes does not mean you should not try again. Perhaps you are due a tax refund.
The IRS tax problem may feel overwhelming. however, You should maintain a copy of your tax return and all supporting papers regardless of how or when you file.
Paying the taxes you owe is the right thing to do, but the IRS understands that some taxpayers may not be able to pay their amount by their deadline.
You have an extra three years to get done with your IRS tax problems. The only thing that changes is that you won’t get your refund as soon. In this situation, it can be worth hiring a professional tax preparer to help you.
Early filing and paying can reduce penalties. You may qualify for a loan, credit card, or tax relief services.