What to do if you have missed your Tax Extension deadline?
Due to the poor economic conditions caused by the pandemic COVID-19, the US Government had extended the tax filing deadline for the Americans due on 15th April 2020 to 15th July 2020. However, millions of Americans have not been able to file their tax returns by the 15th of July 2020 and have filed for an extension. By this extension, the tax return filing deadline would be extended up to 15th October 2020 which has even passed now.
So, if you have missed your extended tax return filing deadline then you might be wondering about certain factors. Let us have a look at what are the common things to be considered if you have missed your extended tax filing deadline.
Should you still file your tax returns if you have missed the extended deadline?
Yes, even if you have missed your extended tax return filing deadline you must file your tax returns soon. You must fill your tax returns even if your income level was lower than the minimum income level set by the IRS i.e. $12,200 when you are filing your tax returns as a single individual and $24,400 in case if you are married and are filing your tax returns jointly for the year 2019. You must also file your tax returns even if you are eligible for availing credit like Earned Income Tax Credit.
The sooner you are going to file your tax returns; the penalties you would pay for missing the extended tax deadline would be less.
What would happen if you miss filing tax returns by the extended deadline?
If you are going to obtain tax refunds from the IRS, then you would not be paying any penalty for missing your extended tax filing deadline. But, if you missed your extended tax deadline and have taxes due to pay to the IRS then you would have to pay penalties. Usually, this penalty is 5% of the tax that has not been paid and varies up to 25%. This penalty is calculated at the beginning of each month for which the tax has not been paid yet.
Will a penalty be charged if you owe money to the IRS?
If you owe money to the IRS, then there would be three types of penalties which you would have to pay.
This penalty would be charged if you are not able to file your tax returns on time. This failure to pay the penalty would be applicable for a full month or for a specific part of the month for which the return filing has been delayed.
If you have not been able to pay your taxes to the IRS on time, then the IRS would impose a penalty. This penalty would be around 0.5% of the tax that is due to be paid to the IRS.
- Interest.Interest would be charged by the IRS if you are not able to file your tax returns on time or pay your taxes according to the due dates.
Will you still be paying penalties if miss the extended deadline due to financial hardships.
With the havoc created by the pandemic COVID-19, it is quite obvious for you to be facing economic hardships. However, if you can state the reasonable cause behind the inability to file tax returns or inability to pay your taxes your penalties might be relaxed.
In case, you have been affected by the natural disaster which has been declared by the Federal Government then you would obtain relief while paying the taxes or filing the tax returns.
So, even if you have missed your extended tax filing deadline you should not forget completely about filing tax returns.