While maybe not the best decision, it is easy to put off filing your taxes with the Internal Revenue Service (“IRS”). This is because life is packed with things to do, places to be, and other worries, especially in the time of coronavirus. Finding the time to organize your paperwork in order to complete a tax return can seem a difficult burden to bear. Indeed, some people go decades without filing their taxes.
When Uncle Sam Takes the Reins
Procrastination can only last so long in the United States. This is because the IRS can file a tax return form for you, known as the Substitute Filed Return. The IRS will put together all the W-2s, 1099s, and other third-party tax reports and prepare a return for you. Not surprisingly, the taxes will generally be higher than if you filed your own tax return. If you do not specifically disagree with the IRS’s determination of the taxes that you owe, they will attempt to collect the debt. This can include liens, levies, and garnishments.
Failure to file your taxes within the IRS deadline can result in numerous tax penalties that can result in higher monies paid to the government. Even if you are unable to pay the full amount at one time, you should still file your taxes within the timeframe. Moreover, you can file an extension with the IRS, which will allow you more time to figure out your tax situation.
Reasons to File Your Taxes
There are several reasons why you should file your taxes, even if you do so beyond the filing deadline. These include:
- Harder to Get Away with Not Filing: While the IRS is a large government agency and can be slow, it has access to information on its side. Indeed, each year the IRS gets a significant amount of information including W-2s and 1099s from third-parties. Although it may take the IRS some time to match up your income with a tax return, they will eventually.
- Falling Behind Creates Stress: Being behind on any bill can cause stress, especially if that bill is related to taxes. Fortunately, you can avoid this stress by filing your tax return on time, or asking for an extension, or filing an amended return. The best way to avoid penalties and interest is to file on time.
- The More Time Passes, the Worse it Gets: Once it has been determined by the IRS that you should have filed a tax return and failed to do so, you will start receiving notification letters warning you of penalties if you do not file a return.
- You May be Entitled to a Refund: The government agency has specific and strict guidelines in place addressing who must file a tax return. If your income falls at or above the minimum amount requiring a return, then you should file a return even if you think you do not owe taxes or you will not receive a refund. Of note, you have three years from your filing deadline to file for a tax refund.
Do Not Press Your Luck
Simply put, everyone who earns income will likely end up with some type of tax issue. Do not make failing to file taxes one of your problems. For answers on your other legal questions, contact H&P Law today.
