Taxes are due on the 15th of April every year. If you pay your taxes late you’ll be subject to a 3% penalty, as well as possible wage garnishment and much more. At Tax Crisis Institute we specialize in helping individuals and families with the complications from unfiled or unpaid taxes.
What you owe the government is based on how much you make minus your deductibles. Throughout the year you will have taxes taken out of your paycheck or if you’re a 1099 business you will have to pay them quarterly. Whatever you owe or is owed to you need to be filed by April 15th unless you file an extension.
Paying vs. Filing Taxes
Not paying your taxes on time has a different penalty than not filing on time. If you don’t submit your completed forms to the government you’ll be hit with the 3% fee noted above up to a total of 22.5% with a gain of 1% each month. However, if you pay late you are only charged .5% interest that gains by 1% each month totaling no more than 25%.
If you file but do not pay on time and you have a valid reason why you are late on payment the IRS does not charge a penalty. If you fail to pay and fail to file after five months your total interest you’ll be charged is 47.5%. If you fail to file the lowest amount you’ll be charged for a fee is $435.
If you are trying to file and have been affected by the current pandemic (or not) there is good news! They have extended the due day to June 15th. There is talk of having a stimulus package sent to the public, however, there is no information as to how it will affect next year’s income calculations.
It is possible that the stimulus package will be added to your net income for 2020 or if it will be just a stimulus. This is currently being debated by Congress for this year only.
Where’s My Return?
If you haven’t submitted your return, but you are owed a return you may be subject to losing your money. There is no additional fee, but they can refuse to return your money to you. You must file within 3 years to get your return.
On the flip side, there is NO statute of limitations on collection of money you owe to the government. This means if you owe the government can go after you at any time for their money.
Filing While Out of The Country
If you’re out of the country you still need to report your income and pay. You are allowed an automatic 2-month extension for filing bringing it to June 15th. It does not specify if you are allowed a further extension in addition to the one for coronavirus.
You will have to pay what is due by April 15 however or you will be subject to a penalty. See above on how to calculate interest.
You can file either by mail or by electronic filing. This includes green cardholders. You can also file your adjusted gross income (AIG) online.
- Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
Estimates for form 1040-ES
- Internal Revenue Service
P.O. Box 1300
Charlotte, NC 28201-1300
What Do You Need To File?
You will need either a social security number (SSN) or an individual taxpayer identification number (ITIN). If you need either of them you can apply for them through this site SSN.
You’ll also need:
- Your filing status
- Single, married
- Married head of household
- Qualified widow filing with dependent
- Married filing separately
- How much you had withheld throughout the year.
- How to determine your gross income. Such as:
- Proof of income (such as w2’s or 1099).
- Proof of spouse’s income if applicable
- A way to file either here for paper form mailed in or here for electronically.
What to Do If You Can’t File on Time
For individuals and families who need more time to file you can request an extension (the 2019 form is linked here). You should estimate the amount of taxes you need to pay and pay them before the April 15th deadline. While you can get an extension on submitting your returns you cannot get an extension on what you will owe.
If accepted your extension to file will be until October 15th. Again make sure to estimate the amount you will need to pay as there isn’t an extension for failure to pay.
What to Do If You Are Deployed To a Combat Zone
When you are deployed to a hazardous duty zone you may be eligible for an extension. The allowed number of days for the extension is up to 180 days from the day you return home from the combat zone. You are eligible starting the day of deployment or the day you enter the combat zone, whichever is later.
When your service member is the owner of a business and deployed to a combat zone you are not eligible for an extension.
Timeline For Filing Tax Returns
You want to make sure you file your returns as soon as possible, no later than April 15 (for 2019 returns it has been extended to June 15th). If you are late filing you will incur a fee ranging from 5% to 22.5%. While paying late will also have interest added to your bill it is a lower starting amount (.5% interest).
Contact Us Today
The Tax Crisis Institute will help you with the problems that can arise if you don’t file your returns on time or you don’t pay your taxes. Not paying or filing with the IRS can be daunting. We are here to help take the stress off and have helped by your side. Please contact us.