Did You Miss Tax Day?

April 24, 2018 by OSYB Staff

It happens even to the best of us.  If you missed tax day this year, despite the extension to April 18, don’t fret too much but act promptly.  Intuit Quickkooks shares 3 steps to minimize your penalties and fees.  Here are a few step you should know and take:

1. Understand the penalties – Most importantly, if you are getting a refund, there is no penalty for filing a late return.  However, if you do owe the IRS there are 3 penalties that you need to be prepared for:

• Failure to File (FTF) Penalty: If you neglect to file your taxes, the fee is 5% of the balance owed for each month you don’t pay your taxes—up to a 25% maximum.
• Failure to Pay (FTP) Penalty: If you don’t pay your due tax balance, you’ll also be hit with a FTP penalty. This is 0.5% of your unpaid taxes for each month they’re left outstanding.
• Underpayment Fees: The exact amount of this fee can vary based on your filing status and situation. If you didn’t pay enough in taxes throughout the year, you should settle that balance owed promptly to avoid being assessed additional fees.
• Interest: You’ll start accumulating interest (compounded daily) on unpaid taxes one day after the due date for the return. That interest will continue accumulating until you have your tax bill completely paid off.

2.  Act immediately – You’ve already passed the deadline date, so act swiftly and minimize further penalties and interest payments.

3.  Pay what you can – “Even if you haven’t yet filed your return to determine the exact amount owed, estimate your taxes and pay as much of that as possible to avoid having additional fees keep piling up.”

A good idea after you have settled your 2017 taxes, is to set in motion a plan to prepare for next year.  Look into making quarterly payments, or consider filing a six-month extension before the tax deadline.  As with all important financial matters, please consult a tax professional.

 

 

Read more:  Missed Tax Day? 3 Steps to Minimize Penalties and Fees

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