Tax Deadline Looms for Procrastinators BY DENSON PEPPER
Have you put off filing your taxes for years? On March 17, the IRS announced that the federal income tax filing due date for individuals for the 2020 tax year is extended to May 17, 2021. If you need time beyond May 17, you may request an additional extension to file your return for 2020, but you still must pay any taxes owed by May 17. However, do not make the mistake of filing late or, even worse, not filing at all.
Why is non-filing such a big deal?
By filing late, or not at all, you subject yourself to several unpleasant consequences, including possibly increasing your chances of being subject to an audit. The IRS may file a return for you, with scant deductions allowed. Failure-to-file penalties will be added to any amounts owed. Finally, the statute of limitations never runs out on non-filed tax returns.
If you’re expecting a refund.
If the IRS owes you a refund, you still need to file in a timely manner. An original return claiming a refund must be filed within three years of its due date for a refund to be allowed in most instances. Do not lose your refund by procrastinating.
If you owe money and can’t pay it now.
If you're required to file and owe a balance, but can't pay all of the tax due, a tax professional will help you establish the best payment agreement. File your taxes on time, even if you owe money, to avoid failure-to-file penalties added to the balance due.
Ignoring your taxes is a bad idea.
The IRS may file a return on your behalf — using minimal deductions that lead to an incorrect assessment — and resulting in a costly and time-consuming mess to fix. The IRS has 10 years to collect the tax debt. The statute of limitations on debt collection never runs out on non-filed returns. Worrying about non-filed taxes will not make your problem go away. Consider making an appointment today with a professional to guide you and help you deal with the tax authorities in a professional manner.
Denson Pepper is a CPA in the Acworth/Kennesaw area with 30-plus years of experience. He is an expert at helping people resolve their income tax problems.
AROUND CANTON | May 2021
39
