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Will I Face Penalties if I Do Not File a Tax Return?

Posted on in Tax Services

San Antonio tax agent

Filing and paying taxes can be a complex matter, and it is understandable that many people put this process off until it is absolutely necessary. For most individual taxpayers, April 15 is the deadline to file an annual tax return and pay any taxes that they owe. In some cases, taxpayers do not file a tax return because they are concerned about penalties for delinquent back taxes, or they may be worried about the possibility of a tax audit if they did not file one or more tax returns in previous years. If you have any unfiled tax returns, you should be sure to understand the potential penalties that may apply and your options for resolving these issues.

Failure-to-File Penalties

If you do not file your tax return on time, and your return shows that you owe money to the IRS, you will be required to pay a failure-to-file penalty in addition to the taxes you owe. While this penalty usually will not apply if you do not owe any money or if you are eligible for a tax refund, you will not be able to claim your refund until your tax return is filed, and you will not be able to receive a refund if a tax return is filed later than three years after its original due date.

Even if you are unable to pay the taxes you owe at the time of filing your tax return, it is usually best to file your return on time, since the penalty for failing to file a return is higher than the penalty for failing to pay taxes owed. The failure-to-file penalty is 5 percent of the total amount of unpaid taxes, and this penalty will be charged for each month or part of a month in which a return is filed late. That is, if a tax return is filed 10 days after it was originally due, the failure-to-pay penalty for the entire month will apply.

Failure-to-file penalties can be charged for up to five months after a tax return’s due date, meaning that the maximum penalty is 25 percent of the amount of taxes due. However, a minimum penalty will apply if a tax return is filed at least 60 days after its due date. This penalty is set at a specific amount or 100 percent of the taxes due, whichever amount is lower. For tax returns due after January 1, 2020, the penalty is $435. This means, for example, that if you owe $300 at the time your tax return is due, and you wait until 60 days after the due date to file your return, you will be required to pay the $300 owed plus a penalty of $300.

Contact Our San Antonio Enrolled Tax Agent

If you have any unfiled tax returns, or if you owe taxes or penalties to the IRS, Ed Villanueva & Associates, Inc. can advise you on how to proceed. We will determine whether you may qualify for penalty abatement, make sure you submit all required information to the IRS and provide you with representation to help you resolve these issues in a way that minimizes your financial burden. Contact our experienced Corpus Christi tax consultants today at 210-382-9015 to schedule a free consultation and learn how we can provide the tax help you need. Se Habla Epanol. 




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