File Late Taxes

Need to File Late Taxes? This article offers helpful tips on taking care of back taxes so filing late taxes isn’t an overwhelming experience.

Helpful Tips You Should Know About How to File Late Taxes

If you need to file late taxes, it is comforting to know that you are not alone. Millions of Americans every year find that on April 16th they now have late taxes. Taxes are usually due April 15th of every year in America, and if you didn’t make the deadline, you now have to file late taxes. There are many reasons why people fall behind and need to file late taxes, sometimes it’s a major life change like a divorce or death of a spouse. If you notice in time that you are going to need to file late taxes, you can get an extension from the IRS for an extra 6 months, which means that you have until October 15th to file. If you did not get an extension, or just haven’t done anything by October 16th, you now really do have to file late taxes. Whatever your circumstance is, you know you need to file late taxes, and here is some helpful information you can use.

If you file late taxes, you will be subjected to a monthly penalty by the IRS.
People who file late taxes and are late on their tax payments must also pay a penalty that increases every month.
When you file late taxes, the penalty for late tax filing is usually greater than the penalty for late tax payments. The IRS may be willing to wait for their money and even work on a scheduled payment plan, but they are much less forthcoming when they don’t receive tax returns.
If you file late taxes, the penalty is typically calculated as 5% of the total amount of unpaid taxes for every month that a tax return is past its due date.
The total accumulated penalty amount can’t exceed 25% of the total amount of your unpaid taxes.
Not paying your due taxes on time incurs additional penalties in the form of 0.5% of the unpaid tax amount. As in late tax filing, the countdown starts with April 15th.
The penalty for late payments may be lifted if you have already filed your tax return and covered 90% or more of the money you owe. For that to happen, you need to ask the IRS for an extension and successfully pay the rest of the late taxes by the time it runs out.
During any given month, a person can’t accumulate penalties of more than 5% of the money they already owe. This means that if you are late both with your tax payments (0.5% penalty per month) and file late taxes (5% penalty per month), at the end of month you will owe only 5% more instead of 5.5%.
If you file late taxes, and the late tax returns are filed more than two months after their original due date or extended due date you either double your total unpaid tax amount or incur a fine of $135, whichever is smaller.
People who can present the IRS with objective reasons for late tax filing or payment deadline can avoid both of these penalties in case of a positive decision. For example, residents of South and Midwest of the United States received penalty relief as a result of devastating storm activity in their area.

For those who still haven’t dropped their 2012 tax return into the mailbox, and still have to file late taxes, or struggle with an earlier year, every piece of information can be helpful for resolving their problem with the least possible losses. Hopefully, the ten important things listed in this article will help you avoid any major penalties for late tax filing.