Consequences Of Not Filing Your Taxes

Consequences Of Not Filing Your Taxes

It’s the time of year when many people are starting to think about their taxes. What happens if you don’t file them? What are the consequences? In this post, we will discuss five of the most significant consequences of not filing your taxes. If you want to avoid these consequences, it is important to file your taxes on time!

What Can Happen If You Don’t File Your Taxes?

Filing your taxes is not optional. The IRS wants you to file your taxes every year, regardless of how much money or if there’s anything owed. Failure to do so can result in a variety of penalties, ranging from fines to jail time. Here are five consequences of failing to file your taxes:

#1 You May Be Subject To A Late Filing Penalty

  • One of the consequences of not filing your taxes is that you may be subject to a late filing penalty. The late filing penalty is generally 5% of the unpaid taxes for each month or part of a month that a return is late.
  • The penalty will not exceed 25% of your unpaid taxes. If you cannot pay the full amount of taxes you owe, you should file your return by the due date and pay as much as you can to avoid penalties and interest. You can use IRS Direct Pay to pay online or pay by check or money order using Form 1040-V, Payment Voucher.
  • You may also request an installment agreement to make monthly payments. If you file your taxes after the due date and owe taxes, you will be charged a failure-to-pay penalty of 0.5% of your unpaid taxes per month or part of a month, up to 25%.

#2 You May Be Subject To A Late Payment Penalty

  • One of the consequences of not filing your taxes is that you may be subject to a late payment penalty. Consequences Of Not Filing Your TaxesThis penalty is assessed by the Internal Revenue Service (IRS) when taxpayers fail to pay their taxes by the April deadline.
  • The penalty is typically 5% of the unpaid tax bill, and it accrues monthly until the bill is paid in full. As such, the longer you wait to file your taxes, the more you will owe in penalties.
  • As a result, failing to file your taxes can end up costing you a significant amount of money in penalties and interest charges. If you’re behind on your taxes, it’s important to take action as soon as possible to avoid these costly consequences.

#3 You May Be Subject To Interest Charges

  • If you don’t file your taxes on time, you may be subject to interest charges. The IRS charges a failure-to-pay penalty of 0.5% of the unpaid taxes for each month or part of a month that the taxes are not paid.
  • In addition, you will be charged interest on the unpaid taxes at a rate of 4% per year. The interest is compounded daily, so the longer you wait to pay your taxes, the more interest you will owe.
  • If you can’t pay your taxes in full, it’s important to file your return on time and pay as much as you can to minimize the penalties and interest charges. If you’re unable to pay your taxes due to financial hardship, the IRS may be able to help.

#4 You May Be Denied Certain Benefits

  • Filing your taxes is not only a legal obligation, but it also provides you with certain benefits. For example, if you are a homeowner, you may be able to deduct the interest you pay on your mortgage.
  • If you have children, you may be able to claim a dependent care credit. And if you make charitable donations, you may be able to take a deduction for those as well. Not filing your taxes can have consequences beyond simply owing to the government money.
  • If you don’t file, you may be denied these and other benefits. In addition, you may be subject to penalties, interest charges, and even criminal prosecution. So if you’re wondering whether or not it’s worth it to file your taxes, the answer is almost certainly yes.

#5 You May Be Subject To Criminal Charges

  • If you don’t file your taxes, you may be subject to criminal charges. This is because the IRS considersConsequences Of Not Filing Your Taxes not filing your taxes to be a form of tax evasion.
  • Tax evasion is a felony, and if you are convicted, you could face up to five years in prison and a fine of up to $250,000. In addition, the IRS may also assess penalties and interest on unpaid taxes.
  • If you can’t pay the taxes you owe, the IRS may place a lien on your property or seize your assets. As you can see, not filing your taxes can have serious consequences. So if you’re behind on your taxes, it’s important to take action as soon as possible to avoid any further penalties.

Conclusion

The bottom line is that you should file your taxes, even if you don’t have the money to pay what you owe. There are penalties for both filing and not filing, so it’s best to take action and deal with the consequences later. If you need help with your taxes, there are a plethora of resources available. You can find tax preparers or even online tutorials for the more complicated returns! Don’t let procrastination keep you from meeting your obligations – get started today!

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