Many people wait until the last minute to file their taxes. Whether it’s due to procrastination or simple forgetfulness, waiting too long can result in ramifications. Allen N. Davey LLC, Attorney At Law, CPA, a Honolulu tax attorney with more than 30 years of experience, reveals some of the consequences of filing your taxes past the deadline. 

4 Consequences of Filing Your Taxes Late

1. Late Penalties

If you fail to file your taxes by the deadline, expect to be hit with penalties of 5% of the tax due per month. Even if you can’t afford to pay the taxes you owe, a tax attorney still suggests filing on time. If you have to pay your taxes after the deadline, you will be charged a less hefty penalty of 0.5% of the unpaid amount each month.

2. Delayed Refund

The longer you take to file your taxes, the longer it will take for the government to issue your refund. Whether you want to spend your refund money on a family vacation or new furniture for your home, you don’t want Uncle Sam to hold it any longer than necessary.

3. Difficulty Applying for Loans

If you don’t file your tax return on time, you may have trouble getting approved for loans. When you want to borrow money for a mortgage, higher education or other things, the financial institution will want to see copies of your latest tax returns.

4. Substitute for Return

If you didn’t file your taxes by the due date, the IRS will contact you and remind you to do so as soon as possible. If you don’t respond, the IRS will file a substitute for return on your behalf, which calculates the amount of taxes you owe based on your income. When filing this return, they won’t consider your tax credits and deductions, so you might overpay on your taxes when it’s all said and done.

If you can’t afford to pay the taxes you owe, consult with a tax attorney. Allen N. Davey LLC, Attorney At Law, CPA provides tax representation to individuals and businesses throughout Honolulu and takes the time to develop a strong tax defense for every client. For more information, call (808) 545-2222, or visit his website for more information.