April 18 has come and gone and tax season is officially over. But life happens and not everyone e-files or makes it to the post office by 11:59 p.m. on Tax Day. If you missed the tax deadline this year and did not file an extension or have extenuating circumstances, there are still some options that will help you minimize any tax burden. However, time is of the essence as fees and interest will start accruing immediately after the tax deadline.
If you do not owe money you will not incur a penalty, but remember if the IRS owes you money, they will be holding on to it interest free until you file.
The news is not as good if you end up owing money.
“Taxpayers who owe tax, and failed to file and pay on time, will most likely owe interest and penalties on the tax they pay late,” according to Tax Tips released by the IRS. “To keep interest and penalties to a minimum, taxpayers should file their tax return and pay any tax owed as soon as possible.”
In fact, for those filing after the deadline, there may be two penalties added to the amount owed. The first penalty is for filing late and the second penalty is for paying late. It is also important to note that interest accrues on top of penalties.
The best way to avoid the tax for filling late is to file as soon as possible, even if you do not have the money to pay the bill. Yes, there will still be a penalty for late payment, but you can avoid or lessen the penalty for filling late.
Paying the full tax bill as soon as possible is the easiest way to avoid the late-payment penalties. The IRS even recommends taking out a loan or paying the tax bill with a credit card. While it may seem counter-intuitive to pay a debt by going into more debt, IRS penalties and interest are often much larger than those of private loans and credit cards, leaving the tax payer with a smaller bill in the long run.
There are many ways to settle a debt with the IRS. Payment options include Direct Pay from a checking or savings account as well as online options available on the IRS website.
“The IRS will work with taxpayers to help them resolve their tax debt,” according to Tax Tips. “Taxpayers should explore their payment options at IRS.gov/payments.