Once tax season begins in January, individuals have until mid-April to complete their tax preparation and file a return. Although this should be enough time to get everything done, there are a number of reasons you may find it difficult to meet the due date. As such, you might consider filing late. While this is an option, you should understand the consequences of doing so, as well as what can be done to avoid or reduce potential penalties. 

What Happens if Tax Returns Are Filed After the Deadline? 

If you don’t owe any taxes or can show reasonable cause for filing past the deadline, there is no penalty. However, if you do owe taxes, the IRS deliberately sets late fees high to encourage timely tax preparation and submission of returns. For each month your taxes are late, you will be penalized 5% of the total tax amount owed, not to exceed 25%. The failure-to-pay penalty is assessed at 0.5% per month you’re late, up to 25%. If you owe both, the maximum charge is 5% per month. 

Requesting an Extension 

If you won’t be ready to submit a return on time, request an extension. This will give you six extra months to finish any tax preparations without facing the late filing penalty. However, you will still be expected to pay your tax obligations by the original deadline. In some cases, you may not be charged the failure-to-pay penalty if you submit at least 90% of what is owed along with your extension request and pay the remaining balance by the new due date.

Whether you’re scrambling to get your tax preparation done on time or need more information about filing for an extension, the professionals at Lee & Smith, PLLC can help. For close to 30 years, this team of highly skilled and experienced accountants has been providing individual and business clients in the Texarkana area with reliable tax services. They stay updated on the latest tax laws and requirements and will ensure your return is prepared with accuracy. Call (903) 832-4339 to schedule an appointment or visit them online to learn how they can assist you in reaching your financial goals. 

For full disclosure and information on filing taxes late, contact their office.