The old saying goes there are only two certainties in life: Death and Taxes.
We know we can’t cheat death, but did you ever wonder what happens if you file your tax return late? Or even worse, you don’t file your tax return at all?
Frankly, I’m too scared to find out what would happen if I didn’t file my taxes .
Just in case you ever flirted with the idea, here’s the penalties you face from the IRS.
If you already missed the boat, here are some options if you missed the tax deadline.
Warning: You don’t want to mess with the IRS. Depending on the nature of the actual return, you are either faced with paying interest or even worse, penalties. Consider, at least, filing a tax extension.
When Are Taxes Due in 2016?
Update: The tax filing date for our 2015 taxes is April 18th, 2016. Emancipation Day is April 16th which falls on a Saturday. The observance day for this will then be pushed back a day to April 15, SO we get an extra few days to
procrastinate fill out our forms.
Interest When You File Tax Return Late
Interest on underpayments or over-payments runs from the extended due date of the tax return, i.e. April 15th of any given year. Regular interest is set by statute, but underpayment incurs a 1% premium rate, compared with the rate of interest that will be paid by the IRS on over-payments or refunds.
Basically, expect to be paying more interest in you owe money to the IRS, versus if you paid too much. If you are owed a refund, you’ll still earn interest on the amount entitled to you, just at a lower interest rate. It’s kind of like getting a loan from a bank versus how much they pay in their savings accounts. [Read more…]