A lot of people dread when taxing time reaches. Questions like how much should they pay or will they get a refund crisscrosses their minds, making it more stressful. Close to 40% of Americans fail to pay taxes on time just because they consider the process tiresome.
The late Benjamin Franklin once opined that death and taxes are the only certain things in this life. So what happens if you miss the tax deadline?
Read on to find out.
- The Failure to File Penalty
Failing to file your tax return on time attracts a penalty of 5% to 25% of the total amount of taxes that you should remit. This penalty applies each month after you’ve missed the tax deadline.
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You can prevent the penalties from accumulating simply by filing the returns at the earliest convenience after missing the deadline. However, the penalties will be more severe if 60 days lapse after the deadline and you fail to file the returns.
The IRS will impose extra fees that could be equal to your total tax amount as punishment for failing to file the returns.
- The Failure to Pay Penalty
Some people file their returns but they don’t follow up on remitting the taxes to IRS. Most people who do this do so because they forget to pay inadvertently. This attracts a penalty of 0.5% up to 25% of the total taxes that you were to pay.
The failure to pay is much lower than the failure to file returns penalty. If you are not in a position to pay your taxes on time just file the returns. You’ll avoid hefty fees when you pay late as opposed to completely ignoring filing your returns.
- What Happens if You Miss the Tax Deadline? Loss of Assets and Privileges
The threat of losing your assets if you’ve not filed taxes for a long time is imminent. The IRS has the authority to lay claim to some of your assets and auction them. They’ll use the proceeds from the sale of these assets to offset your tax obligations.
You’ll also lose certain privileges when you are in tax arrears. For instance, having tax arrears of a certain amount will lead to the confiscation of your passport.
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Loss of assets and privileges can be life-changing for some individuals especially if these aspects were important to them. Luckily, you can engage an emergency tax service consultant to help you prevent this from happening. Get in touch with them at https://silvertaxgroup.com/emergency-tax-services/.
- Visits
IRS will send its officers to hunt you down when you miss tax deadlines. This happens when you owe them large sums of money. Once these officers start frequenting your place then things can get thick pretty quick.
Enjoy the Peace of Mind By Filing Taxes on Times
Above are some of the consequences if you’ve been wondering what happens if you miss the tax deadline. Do not underestimate the gravity of these consequences. Paying off penalties that accumulate over a month is easier but what if it’s 10 years?
Filing and paying taxes on time will give you space and peace to enjoy your earnings. For more educational content, browse through our website.