Tax season can be an overwhelming time for many people, but if you missed the mid-April deadline to file returns or request an extension, you may be feeling especially stressed. You’re likely also wondering what to do next. Those expecting a refund don’t have to worry about getting penalized as they will have up to three years to file and claim their refund. However, those who owe the IRS—or think they might—should consult a tax planning professional and act fast to avoid incurring additional penalties. 

What to Know About Late Tax Filings

Consequences for Filing & Paying Taxes Late

Unfortunately, the consequences of missing the tax deadline can be costly. The IRS may assess both failure-to-file and failure-to-pay penalties. The late filing penalty is 5% of the tax owed for each month one’s return is late, up to a maximum of 25%. The late payment penalty is 0.5% of the unpaid balance for each month your tax debt is due, up to a maximum of 25%. However, if someone can provide a good explanation as to why they didn’t file on time—such as a natural disaster or becoming seriously injured or ill—the IRS might waive these penalties.

Steps to Take When the Deadline Has Passed 

A tax planning service can help individuals get back on track. First, they will prepare your return quickly so you stop incurring late filing penalties. Afterward, you’ll want to pay as much of your tax debt as possible. If you can’t afford to send in the entire amount, apply for an installment plan. In the event making payments will result in a significant financial burden, you may petition for an Offer in Compromise to lower the amount owed. 

How to Avoid Missing Tax Deadlines in the Future 

To avoid having the same problem with tax filing in the future, start thinking about what you can improve upon for next year. Create a system for organizing and storing financial documents so they are easily accessible when tax season arrives. Also, consider hiring a tax planning service to advise you on strategies for minimizing your tax bill throughout the year. 

While you should make every effort to meet tax deadlines, breathe a little easier knowing there are options if you do fail to file your return on time. The experts at Young Hoy & Burnett CPA are available year-round to provide valuable tax planning assistance. They will help explore different solutions and determine which will be most beneficial to your situation. Based in Texarkana, TX, they have been entrusted to take care of clients’ tax needs throughout the Four States region for over four decades. Call (903) 794-2211 to schedule an appointment or visit them online for more information about the services they offer.