Welcome to Extreme Investor Network, your go-to source for all things personal finance. Today, we’re diving into the importance of filing your federal taxes on time and what to do if you missed the deadline.
The federal tax deadline was April 15 for most filers, and if you missed it, experts recommend filing your return and paying your balance as soon as possible. Why? Because if you still owe taxes for 2023, you’ll continue racking up penalties and interest until you file and pay your outstanding balance, according to the IRS.
The late filing penalty is 5% of your unpaid balance per month, capped at 25% of your balance. The failure to pay fee is 0.5% per month, with a maximum fee of 25% of unpaid taxes. Interest is based on the current rates. Mark Steber, chief tax information officer at Jackson Hewitt, emphasizes that the longer you wait to file, the higher the risk of facing these penalties and interest from the IRS and state.
However, accuracy is key when filing your return. Rushing to file without all the necessary information could result in an audited return, processing delays, or agency notices. “A return needs to be completely accurate,” Steber said. “No guessing or estimating.” Even if you’re missing key information, it’s best to file an accurate return as soon as you’re able.
If you find yourself unable to pay your tax balance in full, don’t worry. The IRS offers various payment options, including online choices like IRS Direct Pay and your IRS online account. Furthermore, there are different payment plans available, such as short-term and long-term options based on your total balance. You could also qualify for first-time penalty abatement, depending on the type of penalty and your past compliance with the IRS.
At Extreme Investor Network, we understand the importance of timely and accurate tax filing. Stay tuned for more expert insights and valuable tips to help you navigate the world of personal finance. Don’t forget to check out our other articles for more financial advice and strategies.
