In Mount Laurel, NJ few people get excited about filing their income tax return with the Internal Revenue Service each year, but on-time filing is necessary to avoid penalties, interest, liens and levies. Also, falling behind on your taxes creates unnecessary stress because paying back taxes can be a long process.
What happens when I Don't File My Taxes?
Although there are a few exceptions, filing taxes is a must, so not filing your taxes could have serious consequences.
YOU'LL BE SUBJECT TO A TAX PENALTY FOR NOT FILING
Not filing your income tax return can lead to IRS penalties, including:
- Failure-to-file penalty: If you fail to file your taxes and you owe money, the IRS charges a late file filing penalty of 5% of the tax owed per month or part of the month, the return is late, up to 25%.
YOU'LL MISS OUT ON IRS REFUNDS
Filing a tax return doesn't necessarily mean that you owe money. In fact, most taxpayers get a refund when they file their income tax returns: More than 70% of tax filers receive a tax refund. If you don't file a return, the IRS can't refund the extra money to you. And if you don't file your tax return for three years after the return's original due date, you lose your right to claim that money entirely.
WHAT HAPPENS WHEN I DON'T PAY MY TAXES?
Because paying taxes is something imposed by the federal government, not paying your taxes could leave you in a worse financial situation than you started in.
YOU'LL BE SUBJECT TO A TAX PENALTY FOR NOT PAYING
if you don't pay your taxes when you file, you will end up paying more because of these penalties:
- Failure-to-pay penalty: The IRS charges a 0.5% penalty on the tax owed for each month, or part of the month, the payment is late, up to 25%. The rate becomes 1% if the tax is still unpaid 10 days after the IRS issues a notice of its intent to levy property.
- Interest: Interest accrues on your unpaid taxes from the date the tax is due based on the federal short-term rate plus 3%. Interest compounds daily.
Meet with me today if you have any question about back tax debt.
309 Fellowship Road, suite 200
Mount Laurel, NJ 08054
Tel. 973.840.7350
Fax. 347.344.6942
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