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Some years, April 15 comes as an unpleasant surprise. This year, however, the tax deadline is July 15. Still, with the daily stress of running a small business or working from home and maintaining the household, getting your taxes filed on time might seem challenging. Although filing late isn’t ideal, enlisting the help of an accountant and reading the following guide will prepare you for penalties and how to proceed responsibly.

Penalties to Expect

There’s a difference between a failure-to-file penalty—applied to those who don’t file by the deadline—and a failure-to-pay penalty, which is applied to those who do not pay all the taxes they owe by the deadline.

A failure-to-file penalty is 5% of your unpaid taxes for each month or part of a month that your tax return isn’t filed. The penalty will apply to late filers starting July 16 but will not surpass 25% of your unpaid taxes. For those who file their taxes more than 60 days after the filing deadline, the minimum penalty is either $135 or 100% of unpaid taxes—whichever is less.

For a failure-to-pay penalty, the IRS will charge 0.5% of your unpaid taxes for each month or partial month past the due date. Like the failure-to-file penalty, this takes effect starting the day after the filing deadline.

In general, the failure-to-file penalty costs more than failure-to-pay. Your accountant will advise you to file a tax return even if you can’t pay what you owe. By submitting as much as possible, you’ll avoid accruing more interest and penalties.

How to Proceed If Your Taxes Are or Will Be Late

accountantIf you know your taxes will be late, plan ahead and file for an IRS tax extension by the deadline. An extension usually affords you an extra six months, but this year it extends the deadline to October 15.

While an extension gives you extra time to file your tax documents, it doesn’t give you more time to pay taxes you already owe. If you think you owe money this year, make your payment—or partial payment—before the original deadline of July 15.

If you pass the tax deadline without filing an extension, file as soon as you can. Otherwise, each additional day costs you. If you can’t pay in full, attach an Installment Agreement Request to your return and set up a monthly payment plan with the IRS.

 

For accountants you can trust with your business or personal taxes, contact Gillette & Associates, LLC, in La Crosse, WI. For over two decades, they’ve provided clients throughout the Coulee Region with bookkeeping services to help them save money and thrive. With their business consulting services, get expert advice for starting, forming, or selling your business. When it comes to your office’s daily needs, their accountants will optimize tax returns and even take over your payroll service to ensure happy employees. Whether your business or household needs help for tax season, or you’d like to create a retirement plan, call (608) 784-8355. Visit their website to browse their financial tools.

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