Individual tax returns may not be due until April, but it’s never too early to get a jump on preparing and filing your taxes! Avoid stress and potential penalties for late filing or late payments by starting the process early.
Do I Really Need to File on Time?
In a word–yes! If you don’t file your tax return by the April 15 deadline, the IRS can assess penalties that mount month-by-month, assuming you owe taxes. If you don’t owe taxes, you may not be hit with a penalty, but you could lose your refund.
What If I File an Extension?
If you’re not quite ready to file your tax return in April, you can file an extension to allow yourself more time. However, you do still need to pay any tax due (even if it’s an estimate) on or before April 15. When you later file your tax return, you’ll be able to account for the amount you already paid. It’s better to over-estimate how much you owe because you’ll get refunded if there’s a difference. If you underpay, however, you may still be assessed a penalty for paying late.
Why Are Tax Penalties Such a Big Deal?
The problem with getting charged a penalty for unpaid taxes is that it doesn’t stand still. The amount you owe will increase, with interest, and can quickly snowball into an unpleasant financial situation in which the IRS has the authority to garnish your wages, levy money out of your bank account, and even take your property. The best way to avoid any of those worst-case scenarios? File and pay your taxes on time!
If you have any questions about timely filing, tax penalties, or extensions, your local tax experts can help. The team at Pro Tax Resolution is available at tax time and all year long to help you navigate the tax system. If you have questions, we have answers–call us today to find out how we can help!