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 2014?
Update: The tax filing date for 2014 is April 15th. Since April 15th falls on a Tuesday and there is no government holiday (unlike past years), that is the day your taxes are due.
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…]