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This article was last updated Apr 08, 2013, but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.
The 2013 tax filing deadline is April 15th. If you're among the thousands of Americans who still haven't filed yet, it may be because you're not worried about the consequences. Yes, you have the option of filing late, but you may face a penalty if you decide to do that. Before you risk owing more money to the government, you need to find the time to get your taxes done. Something is better than nothing.
Here is a look at the tax penalties for late filing so you know just what sort of consequences you'll face.
Late Filing Tax Penalties
Most countries have a set rule about filing taxes late, like a 10% charge or a $500 fine. The U.S. doesn't make things quite that easy. They have different penalties for different situations. Those include:
- The IRS will file a substitute return. This will not include any exemptions or deductions you are due. It will only be based off information from your W-2's or similar tax documents.
- You will be charged penalty fees and interest. The amount of those fees will be based on your past history with tax payments and the amount of money you currently owe or will owe after the substitute return.
- Your tax payments will go into collections. This means that the government can put a lien on your home, car, bank account, or whatever else they need to get money from you.
- You could go to jail. This only happens if you fail to file for many years and fail to make payments along the way. If this is your first or second moment of procrastination, you shouldn't have to worry about jail time.
How to Avoid Tax Penalties
The obvious way to avoid late filing penalties is to file your taxes before the deadline. A lot of people worry about doing that because they don't think they can get all their paperwork together in time. Even if you file a not-so-accurate return, you can always amend or appeal it later. You just need to get something in.
If you can't find the time to see a tax agent, file your returns on your own. You can print off all the documents and instructions right online, and then all you have to do is fill in some numbers. Once the tax season dies down, you can meet with your accountant and have him take a look at your already filed return. Then he can tell you what you may have missed out on. File your amended return right away, and you'll be able to earn your rewards while bypassing the penalties.
If you cannot file your taxes because of an emergency, contact the IRS and explain your situation. Perhaps you were in a car accident and have been in the hospital for the past month. The government will understand the circumstances and try to work with you. They will have you fill out an application for extension, which will grant you extra time to turn your papers in. Abide by the new deadline, and you'll be set.
If you need a little extra motivation, just think of the relief you'll feel once you have your tax returns turned in. You can rest assured that you are on the government's good side and you won't have a weight looming over your shoulder. So, why are you still reading this? You need to be off filling out your tax forms! No worries – we'll still be here tomorrow when you're done.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. *The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.