Whether the filing deadline slipped your mind or you just didn’t feel like filing your taxes this year, you may now be wondering what happens when you don’t submit a tax return. There actually isn’t a single answer to this question, because it all depends on whether or not you owed tax when you failed to file.
If you are owed a refund and you fail to file a tax return, you risk forfeiting that refund. The IRS requires you to file your tax return within three years of the April filing deadline (or October deadline, if you filed for an extension). If you do not, you will lose any and all refund you had been owed.
If you owe tax and you fail to file a tax return, you will face tax penalties. The failure-to-file penalty comes into play when you owe tax but don’t file a return. This tax penalty equals 5% of the tax owed, up to a maximum of 25%. In addition to the tax penalty, the IRS may actually file a return for you. This tactic is typically used after you ignore several reminders to file your return. While letting the IRS prepare your return might seem like an easier solution than having to file your own return, it’s generally not a good idea. That’s because the IRS is typically unaware of details of your life that can reduce your tax owed, such as deductions for charitable donations, tax credits for energy-efficient home improvements, medical bills, and other tax-reducing items. As a result, tax returns prepared by the IRS typically result in more tax owed than if you file your own return.
At Taxation Solutions, Inc., we can help you file your late tax returns, even going back years. We’ll help you sort through your tax problems and penalties to develop a cohesive strategy for filing back tax returns and securing a solid tax settlement. So whether you forgot to file your 2016 tax return or you’ve failed to file for several years, our committed team can work with you to get you back on the right track.
Not filing your taxes isn’t worth the consequences. Call in Taxation Solutions, Inc. now for the professional tax help you deserve!