Taxes can be a stressful time of year, especially if you owe money to the IRS. However, one of the most important things you can do is to file your tax return on time, regardless of whether you can pay the full amount immediately. In this post, we'll discuss why filing on time is crucial and the potential consequences of missing deadlines.

The Importance of Filing on Time

Avoid Late Filing Penalties: One of the primary reasons to file your tax return on time is to avoid late filing penalties. These penalties can be substantial and can add up quickly.

Prevent Interest Accrual: If you owe money to the IRS, interest will begin accruing on the unpaid balance. By filing your return on time, you can potentially limit the amount of interest you'll have to pay.

Establish a Payment Plan: If you can't pay the full amount of your tax liability immediately, filing on time allows you to discuss payment options with the IRS and potentially set up a payment plan.

Understanding Late Filing and Late Payment Penalties

Late Filing Penalty: If you fail to file your tax return by the due date (or file an extension), you'll be subject to a late filing penalty. This penalty is typically a percentage of the unpaid tax.

Late Payment Penalty: If you owe money to the IRS and fail to pay it by the due date, you'll be subject to a late payment penalty & interest will be added the longer you go without paying. This penalty is also a percentage of the unpaid tax.

Filing an Extension

If you need more time to prepare your tax return, you can request an extension. However, it's important to note that an extension only gives you more time to file your return, not to pay your tax liability.

Important Dates to Note:

S-Corporations, LLC's, and other Corporations need to file their tax return (or an extension) & PAY, by March 15th.

Individuals need to file their tax return (or an extension) & PAY, by April 15th.

If you file an extension:

S-Corporations, LLC's, and other Corporations who file for an extension (before the March 15th deadline date), must have their Tax Return filed by September 15th. If you do not file by this second deadline date, you will have a late filing penalty.

Individuals who file for an extension (before April 15th dead line date), must have their Tax Return filed by October 15th. If you do not file by this second deadline date, you will have a late filing penalty.

Conclusion

Filing your tax return on time is a crucial step in managing your financial obligations. By avoiding late filing and late payment penalties, you can potentially save yourself a significant amount of money. If you're struggling to pay your tax liability, don't hesitate to reach out to the IRS or a tax professional for assistance.