When You Don't File Your Taxes

Taxes are something that most people are required to file each year. Of course, it’s also something most of us dread, especially if you know you’re going to be hit with a big tax bill.

Don’t make the mistake, though, of thinking that you can simply “skip out” on filing your taxes. In fact, doing so comes with some serious potential consequences.  

Penalties and Interest, Oh My!

When you don’t file your taxes by the April deadline, penalties immediately start piling up. This includes the ‘failure to file” penalty, which is 5% of the amount of tax you owe for each month you don’t file your return. Eventually, you could end up owing 25% of any taxes due plus the taxes themselves.

On top of this, there’s a “failure to pay” penalty related to the taxes that you owe, as well as interest on all of your tax debt. When you consider all of these penalties and their costs, it’s easy to see that you should file on time no matter what.

You’ll Miss Out on Potential Returns

If you don’t owe any taxes, the IRS won’t hit you with a bunch of penalties for not filing. However, it will hold on to your refund.

This means that you could miss out on money that is owed to you, all because you forgot to file or put it off.

If it’s too late and you’ve already missed a filing deadline, don’t panic. Instead, see a tax professional, file your taxes, and do everything you can to get back on track. Payment plans and other options exist to make this easier than you might think, but it’s definitely nice to have a professional to help you wade through it all. And, when you’re done, you can take steps so that you never miss a tax filing deadline again.