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Saturday, Jan 28, 2023
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Finance

What Happens if I Dont File Taxes

Discipline and organization are essential in money and tax talks. Even so, many people make frequent mistakes when filing taxes, but they aren’t at fault.

You can resolve some issues with the IRS, but others still can’t file their taxes. If you’re in that situation, you might wonder, “what happens if I dont file taxes?”

If that’s the case, read through this guide to learn more about the consequences and what you can do about it.

What Happens If I Dont File Taxes in 2022?

Whether you file your taxes or not may be due to several reasons, ranging from those you can to cannot control. If you choose not to, it results in penalties that come with warnings and fines.

Failure to File Penalty

You get a penalty called failure to file when you miss the due date to file tax returns. It usually costs around 5% of the unpaid taxes.

Note that the penalty for failure to pay is a separate concern. If you fall under the criteria, it can get issued along with failure to file a penalty, incurring more fees.

Penalties also apply when the IRS audit finds your actual and declared pay doesn’t match.

Pay Interest

You will have to pay interest added to your unpaid tax and penalties. These usually start from the tax or tax return due date.

Lose State Tax Refund

The IRS can seize your state tax refund to offset the federal taxes you owe. They can also enact levies on specific federal payments for collecting overdue taxes.

How to Avoid Failing to File Taxes

If you didn’t file taxes last year or months ago, you might already know the consequences of failing to file them. Besides reminding yourself to file and pay your taxes, here are a couple more ways to avoid failure.

Get an Extension of Time

The IRS allows you to submit an appeal to receive more time to prepare your tax return. It doesn’t guarantee an extension upon submission, but it can be helpful if they accept it.

Apply for Payment Plans

Some people decide not to file tax returns because they can’t pay for them at once. But if you don’t file taxes, it results in higher payments.

You can contact the IRS or other agencies to apply for a payment plan that helps cover taxes. The setup helps avoid long-term tax penalties.

You can also request an installment agreement if you prefer it over other payment plans.

Contact the IRS for Help

If the following options don’t work out, don’t hesitate to reach out to the IRS. The IRS will likely grant you help with failed tax filing if you present them with a valid reason.

Learn More About Failing to File Taxes Here

Filing tax returns is a complicated process, but it’s even more so when you fail to file them. A good way around these is by learning more!

Keep browsing to solve concerns like “what happens if I dont file taxes” and similar questions.

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