If you were unable to meet the April 15 tax filing deadline, chances are you filed for an extension that expires on Oct. 15th. What happens if you also miss the Oct. 15th deadline?
Unfortunately, you can’t file for a second extension; the IRS did away with that program in 2005. Instead, taxpayers are only permitted to file for one extension, using form 4868. Here’s what can happen if you missed the Oct. 15 deadline:
The IRS assess the penalty/fines with the following formula:
- 0.5 percent of your unpaid taxes for each month you fail to file a tax return
- Five percent of unpaid each month after the Oct. 15 deadline
- A maximum 25 percent penalty based on taxes owned for each month you do not file your taxes
- A maximum of 25 percent penalty for any taxes you fail to pay
You can escape these fines and penalties if you can prove to the IRS that you encountered circumstances beyond your control, such as a natural disaster or illness that prevented you from filing on time.
What You Can Do
First and foremost, pay the IRS. Even if it is just a portion of what you owe, you will establish that you are making a good faith effort to pay your taxes. This demonstrates to the IRS that you have no intention of evading your responsibilities as a taxpayer.
File your return as soon as you are able; filing online will deliver the return to the IRS faster.
Promptly reply to any IRS correspondence, and keep them informed of your efforts to pay your tax balance. By having an open line of communication, the IRS will be more likely to work with you should you need to make payment arrangements.
If you are making payments by check, keep all copies of your cancelled checks. The same applies to any credit/debit card statements showing your payments to the IRS.
Missing the Oct. 15 deadline can set the stage for additional penalties and fines. File your return as soon as you are able, and make at least a partial payment to the IRS if you can’t pay the full amount due.
If you can demonstrate that your inability to file your return by the extended Oct. 15 deadline was due to circumstances beyond your control, the IRS may waive the additional fines and penalties.
Life happens, and running afoul of the IRS can be one of the consequences of missing a tax deadline. Keep an open line of communication, demonstrate good faith efforts to make your payments, and you’ll be able to take control of your taxes…even after the deadline.