The IRS does not leave you in any doubt about when to pay tax – the tax filing deadlines are declared very early in the tax season, so that there’s no confusion. And yet, a lot of people miss out on paying their taxes on time.
By the time you get past the deadlines, the conditions of the tax filings change considerably. You are hit by severe tax penalties at high interest rates, which can set you back by thousands of dollars. So, how to pay your taxes on time, and keeping in mind the topic of this article, what to do if you’ve missed your tax deadline.
Here’s what to do if you’ve missed out on your tax deadline…
1: Don’t Wait
Don’t wait any longer, pay as quickly as possible. Penalties will need to be paid. Make a note of all the penalties to be paid, such as the penalty for failing to file, for failing to pay and for underpayment of tax returns. The tax penalty would depend on the pending amount, how long you take to file your tax returns and how long it takes you to pay them. Even if you’re not able to pay the tax penalty in full, pay as much as possible. Just finish all pending tax work as quickly as possible and make a note of the penalty to be paid.
2: Analyze the Reasons
Analyze the reasons for the delay in paying tax or filing tax returns on time. If you’re able to identify why you failed to file your tax returns when you should have, you will be able to avoid paying the penalties in the future.
Perhaps you couldn’t get some tax documents when you needed them. In that case, pay the amount stipulated by the document in the previous year. If there’s a default payment that can be made, pay it as well.
Once you get the documents in hand, you can then file the updated tax return. Look for solutions and complete the task as soon as possible. If you’re not sure how to do this, don’t hesitate to approach an experienced accountant for help.
3: Request a Tax Extension
Request a tax extension if there are genuine reasons why you cannot pay taxes on time. By making such a request, you will get more time to pay the tax, but it’s still important to file your tax returns on time.
By requesting for an extension, you can pay the amount in October. Just make sure there are no misspellings or numerical errors in the request letter sent to the IRS for an extension. In that case there is a risk of your request getting rejected. So check your request carefully before sending it.
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