Taxpayers should file all tax returns that are due, regardless of whether full payment can be made with the return. Depending on a business’ or an individual’s circumstances, a taxpayer filing late may qualify for a payment plan. All payment plans require continued compliance with all filing and payment responsibilities after the plan is approved.
Facts about Filing Tax Returns
- Failing to file a return or filing late can be costly. If taxes are owed, a delayed filing may result in a penalty and interest charges that could substantially increase your tax bill. The late filing and payment penalties are a combined 5% per month (25% maximum) of the balance due.
- If a refund is due, there is no penalty for failing to file a tax return. But by waiting too long to file, you can lose your refund. To receive a refund, the return must be filed within three years of the due date. If you file a return and later realize you made an error on the return, the deadline for claiming any refund due is three years after the return was filed, or two years after the tax was paid, whichever expires later.
- Taxpayers, who are entitled to the Earned Income Tax Credit, must file a return to claim the credit, even if they are not otherwise required to file. The return must be filed within three years of the due date to receive the credit.
- If you are self-employed, you must file returns reporting self-employment income within three years of the due date to receive Social Security credits toward your retirement.
Taxpayers, who continue to not file a required return and fail to respond to IRS requests to do so, may be subject to a variety of enforcement actions, all of which can be unpleasant. Thus, if you have returns that need to be filed, please contact me. I can help you bring your tax returns up-to-date, and, if necessary, advise you about a payment plan.