Whether you’re ready or not, income tax season is here. For some, gathering up all the necessary documents to file taxes can be overwhelming and time-consuming. This can lead to putting off taxes and filing late. If this sounds like you, here’s what can happen if you don’t file your taxes on time.

What Happens If You File Taxes Late? 

The federal penalties for filing your taxes late will depend on whether you owe money or are getting a refund. Luckily, if you’re among the 75% of filers who receive a refund, you won’t be charged any penalties for filing your federal income taxes late. The downside is that you won’t receive your refund until you do file.

If you owe income tax payments and file late, you will be charged a failure to file penalty. The penalty is 5% of the amount you owe for every month you fail to file after the due date. If you file more than 60 days after your income tax return is due, you’ll be fined a minimum of $210 or 100% of the amount you owe, whichever is less. The IRS applies penalties on a case-by-case basis so it’s impossible to estimate the exact amount of penalties you’ll owe. You will be mailed a bill if penalties are applied.

Avoid Penalties by Filing an Extension

If you know that you won’t have your taxes filed by April 15^th, you can avoid failure to file penalties by filing an extension. An extension will give you until October 15th, 2020 to file your federal income tax.

Even though you’re filing an extension, you are still required to pay 90% of your federal taxes due for the previous year by the deadline of April 15th. If you fail to do so, you may be subject to a failure to pay a fee, which can be as high as 25% of the amount you owe.

If you need help filing your income tax return this year, contact the team at Master Finance in San Marcos, TX. The expertly trained team at Master Finance abides by a strong ethical code and are adequately equipped to prepare your tax return. Visit their website to learn more or contact them at (512) 392-6102 to set up an appointment.