What to Do If You Missed Your Tax Filing Deadline/Extension
Oct. 10, 2022
Taxes are an inevitable part of adult life. Missing the deadlines or extensions for filing your taxes can cost you a significant amount of money in penalties.
If you missed the deadlines to file federal income taxes for 2019 and 2020, the Internal Revenue Service (IRS) is offering a reprieve on the penalties. In fact, those who have already paid penalties for late returns for those years are getting refunds. Now that we have emerged from the height of the pandemic, the IRS will be back to business. Don’t expect any leeway if you file late.
There are exceptions to missed deadlines and options for putting yourself right with the tax man again. If you want to know what those are and how to take advantage of them, I can help.
At Zuckerman Law, LLC, I have been helping clients who missed their tax filing deadline or extension for more than 30 years. As a former accountant with a Master’s in Tax Law, I understand what the tax man wants, how the process works, and how to help clients, like you, in Fort Lauderdale and throughout South Florida, including Aventura, Boca Raton, Hollywood, Miami, North Miami Beach, and Sunny Isles, put things right again.
Are There Exceptions to the Filing Deadline for Taxes and Extensions?
There were some exceptions to filing deadlines during the chaos and economic uncertainty of the pandemic. Those exceptions are extremely rare. However, certain people may qualify for additional time to file in certain circumstances. These include:
Members of the military serving in combat zones as well as their stateside spouses if filing a joint return;
Non-military employees of defense contractors and other support personnel working in combat zones;
A U.S. taxpayer living outside the country and Puerto Rico and working in a military or non-military job on the date of the filing deadline; and,
Individuals who reside in a disaster area, businesses located in a disaster area, or those whose tax records are located there, and relief workers assisting in official disaster areas.
What Are the Possible Penalties for Missing Filing Deadlines?
If you miss the filing deadline, you will be assessed a monetary penalty representing a percentage of the tax you owe but did not pay in a timely manner. That percentage is based on how late you are.
The IRS assesses a 5% penalty for each month your payment is late, up to a maximum of 25% of the taxes you owe. That may lead you to believe that after five months, the penalty remains the same so you can wait longer. However, the IRS also charges interest on the unpaid amount. That includes the tax, late penalty, and the interest. That can all add up to a lot of money.
Moreover, you should know that if you are late filing with an extension, the penalties are assessed as of the date the original filing was due.
What Can I Do If I Miss the Tax Filing Deadline?
If you can pay the tax, penalties, and interest you owe, the best course of action is to file immediately and pay it in full.
If this is the first time you have missed the filing deadline and you have paid your taxes in full for at least the past three filing years, you may qualify for first-time abate. You are not relieved of the tax you owe, but you may obtain an administrative waiver of the penalties due to the current unpaid amount.
Many clients tell me, “I didn’t file my taxes on time because I can’t pay what I owe.” Not being able to pay your taxes in full as required by law is certainly not uncommon. But, as you can see, once they are overdue and penalties and interest begin to accrue, the financial situation simply becomes more dire and far more stressful than it already is.
If you can’t pay what you owe, you can request a short-term or long-term payment plan that will help you spread the payments on your tax bill over time. Approval of a payment plan does not end accrual of penalties and interest, so the shorter the plan, the less penalty you will need to pay.
If you owe less than $10,000, it’s likely you will be approved for a repayment plan lasting up to three years. The more tax you owe, the more information the IRS will request about your assets and income to determine how quickly you should be able to repay what you owe.
Zuckerman Law, LLC Can Help
The penalties for not filing taxes can quickly become much more expensive than the taxes were on their own. As a tax attorney, I don’t judge my clients for missing filing deadlines that have left them in arrears. Instead, I explore options with them and seek the best solutions for each of them to get out of tax debt.
If you are looking for a solution to your tax woes, call Zuckerman Law, LLC in Fort Lauderdale, Florida, now to schedule a time when we can visit.