What non filing penalties do you face when you don’t file a tax return

What Non Filing Penalties do you face when you don’t file a tax return?

If you do not file your income tax return by the due date, you will be assessed penalties and interest that will accrue on any amount that is owed. So, did you miss the April 15th deadline for this year’s return? Do you have more than one year that you did not file a return? If so, you are facing IRS penalties. If you are a medical professional it is especially critical to understand cash balance plans for doctors and physicians.

The first thing that you need to do is FILE YOUR RETURN. Do not let the fact that you believe you can’t afford to pay prevent you from filing the return. It might sound cliché, but in this case, “better late than never” is really the truth. Every day that passes that you do not file the return means additional penalties and over time, they will just continue to add up.

If you are just a little past the April 15th deadline, or if you know you won’t be able to file by then, you should request an extension. This will give you until August 15th to file the return. An extension is for the paperwork only, it does not provide you with extended time to pay your tax liability and if possible, you should estimate the amount you owe and pay on time. But you may certainly need an FAQ or questions.

Tax penalties will be assessed at 5% of the amount due for any return that is not filed. This will continue to accrue for every month that the return is not filed. The amount will continue to grow and can reach 25% of the tax amount. On top of the late filing penalty, you will also be charged a penalty for not paying when the return is filed. This is at a rate of .5% of any tax not paid and will accrue quickly to 1% a month once the IRS sends you the notice for non-payment. Don’t forget that you also have a contribution deadline. Over time, this amount will also continue to grow to reach 25% of the tax amount.

As you can see, the penalties can be quite costly the longer that you fail to file a return. The best action that you can take is to quickly file your late or missing return and to pay the tax obligation as quickly as possible. If you can’t afford to pay, however, at least filing the return will help you avoid additional non filing penalties. You then may be able to work with the IRS to settle your financial obligation in payment installments or in a lump sum arrangement that will reduce the amount that you owe.