WHAT WILL HAPPEN IF I DON’T FILE MY TAX RETURN ON TIME? WHAT IF I HAVE TAXES FROM PAST YEARS THAT I STILL NEED TO FILE?
August 17, 2016 | BANKRUPTCY
This year, 2013 individual tax return filings are due to the Internal Revenue Service (IRS) no later than April 15, 2014. The deadline is the same for state, local, and school district taxes in Ohio. A common and unfortunate misconception for tax filers is that taxes owed do not become due until the return is filed. That is not the case. Any taxes owed for 2013 tax year are due to be paid to the IRS, State, etc. by April 15, 2014, regardless of whether the return is filed. Many will say, “I couldn’t afford to pay the taxes I owed, so I didn’t file them.” This misconception often puts the tax filer in a worse position than if he had simply filed the tax return on time, even without the ability to pay the amount owed.
If you owe:
If you have completed your individual tax return (Form 1040, 1040A or 1040EZ) and find that you owe taxes this year you should file your return on time. Before filing your return, you may wish to ask your accountant or CPA how you may be able to reduce your tax liability. For example, if you have an IRA, SEP-IRA, or individual 401K, you may still be able to make a contribution that will apply to the 2013 tax year to reduce your tax liability. Remember, if you fail to file on time, it does not mean that the money you owe is not yet due. Instead, the IRS will immediately assess a late-filing penalty and late-payment penalties as well as to assess an amount owed based on information made available to the IRS from your employer or others. The IRS will then begin tacking on interest to the assessment of taxes due. To prevent this, file your return on time. If you have the ability to send the full payment or a partial payment toward the amount owed, do so. If you need more time to pay and owe less than $50,000.00, you may wish to request an installment agreement by filling out Form 9465, or go online to fill out a request for an installment agreement by clicking here.
If you are due a refund:
If you are due a refund from the IRS or State, you will also want to file your return on time. Otherwise, your refund may be reduced by late-filing penalties. You may also lose your ability to claim tax credits or receive a refund all together if you file too late.
If you have past due taxes that you still need to file:
You should file taxes for previous tax years due and not yet filed in the same way and to the same mailing location you would file an on-time return. However, if you have received a notice or request from the IRS to complete and send your past due return to a certain address, comply with the request in the notice. You can find Federal Forms by going to www.irs.gov and typing 1040 along with the tax year you need to file into the site search bar.
If you cannot afford to pay all of your monthly debt payments and you owe tax debt, you may want to consider filing a Chapter 13 bankruptcy. This type of bankruptcy case can stop interest and penalties from accruing on past due tax debt and allow you to pay off all of your debts, including your tax debt, in one affordable monthly payment. Contact Laura Nesbitt at The Nesbitt Law Firm today for more information.