No worries if you have missed your tax extension deadline, you could be forgiven for that. Missing the tax extension deadline is very much similar to missing the tax day itself. Of course, there will be penalties and interests on your unpaid balance but you can still recover from this.
Failure to File vs. Failure to Pay:
If you do not know this already then let us tell you that there are penalties for both failing to pay your taxes and failing to file your taxes on time. This means that failing to pay your taxes will get you to pay an extra 0.5% on the unpaid balance of your taxes. In case you want to know the penalty on failure to file then it is 4.5% on the unpaid balance.
If you are someone who has filed for an extension and did not file latest by 15th October then you will get hit by the failure to file. If you someone who wants to file for an extension then you must file your return on 15th October, failing to pay anything will get a half-percent penalty raised. If you could manage to pay some of the amounts by July 15th then you can easily save yourself some of the interest.
Did You Get a Premium Tax Credit?
Well, you must be wondering what a premium tax credit is? A premium tax credit is used to help pay for insurance. If you want to file for one, then you must file and pay as early as you can or you might end up losing it.
What If You Are Due to a Refund?
Well, that is great if you are due a refund, why? Since it means that there is no failure to file a penalty because it is not applicable in this case. If you do not want your return back the IRS will be too happy to keep your money. However, if you do want your return back then you must file for it. You would not get any added interest on your refund by letting the IRS keep it, however, if you do not file for it in three years then you would not get it back.
What if you Owe Taxes?
If you have filed for an extension in July and then missed filing by October 15th, not only will the interest continue to be added to your tax debt but you will also become a victim of a failure to file a penalty, which Is certainly more expensive than the failure to pay.
The best advice is to file as soon as possible however that would not help in eliminating the penalties. Make sure to pay whatever you can to lower down your tax burden, this way you can get fewer interests and penalties accrued. Until you pay off your entire tax balance the penalties will continue to be added.
So, by the end of this article, we hope we have helped you with the issues and questions that you might be having related to missing out on tax extension if you want to know more about this it is highly advised to hire a professional tax relief firm and get your problems sorted.
