For most individual filers, taxes are due on April 15 every year (or the following business day if the deadline falls on a weekend). However, many filers miss this crucial deadline, incurring significant penalties that could have been avoided. According to Osborne Tripp & Schmidt, respected tax attorneys in Sparta, WI, filing your returns on time is critical, as not doing so may result in several less-than-ideal scenarios.

Lost Tax Refunds

If the IRS owes you a tax refund, there is no financial penalty for filing your returns after the deadline. However, taxpayers forfeit any tax refund not claimed within three years, making them impossible to claim later.

Late-Filing Penalties

If you owe taxes, failed to file an extension, and didn't submit your returns by the deadline, the IRS will assess a fee of up to 5% of the amount owed per month, up to a maximum of 25%. Taxpayers who miss the deadline by more than 60 days will face a minimum fee of $135 or 100% of your tax liability, whichever is less.

Late-Payment Penalties

In addition to late-filing penalties, you would be subject to a separate fee for non-payment, which amounts to 0.5% of the total taxes owed per month, up to 25%. However, the IRS will waive this fee for any month you owe for both late payment and late filing. Because the late-payment penalties are significantly less than those assessed for late filing, most tax attorneys encourage their clients to file their returns on time, even if they are unable to currently meet their payment obligations.

The legal team at Osborne, Tripp & Schmidt pride themselves on working closely with each of their clients, developing personalized solutions designed to achieve the best outcome in any situation. Learn more about their services online, or schedule a consultation with a tax attorney by calling (608) 269-2400 today.