Hi everyone, I’m Bette Hochberger, CPA, CGMA. For today’s #TaxTipTuesday, I’m going to be giving you some tips on what to do when you’ve missed the tax deadline.
So, you missed the tax deadline. Maybe life got hectic, or perhaps you simply forgot. It happens. But what now? While the idea of IRS agents knocking on your door might seem terrifying, the reality is less dramatic – yet still important to address. Filing or paying late can have financial consequences, but the key is not to panic.
Here’s how to minimize the damage and get back on track:
Assess the Situation
Take a moment to understand what exactly you missed. Did you fail to file your return, or did you file but didn’t pay what you owe? Understanding the specifics will help you navigate the next steps effectively.
File Your Tax Return ASAP
The longer you wait to file, the more penalties and interest you may accrue. Even if you can’t pay what you owe right away, filing your return is crucial. You can always work out a payment plan with the IRS.
Pay What You Can
If you can’t pay the full amount you owe, don’t avoid the issue. Pay whatever you can afford as soon as possible. This will reduce the amount of interest and penalties you’ll incur.
Consider Payment Options
The IRS offers various payment options for those who can’t pay their taxes in full. These include installment plans and offers in compromise. Explore these options to find the best fit for your financial situation.
Stay in Communication
Ignoring the issue won’t make it go away. Stay in contact with the IRS if you’re unable to pay your taxes on time. They may be more lenient if you’re proactive about addressing the situation.
Monitor Your Mail and Emails
The IRS will likely send notices regarding your unpaid taxes. Make sure to stay on top of any correspondence from them, as ignoring it could lead to further complications.
Learn from the Experience!
Missing the tax deadline can be stressful, but it’s also an opportunity to learn and improve. Set up reminders for next year, organize your financial documents throughout the year, and consider working with a tax professional if you need assistance.
Remember, while missing the tax deadline can be costly, it’s not the end of the world. By taking proactive steps to address the situation, you can minimize the financial impact and get back on track with your taxes.
As always, stay safe, and I will see you next time.