13 Jun Haven’t Filed Your 2018 Return Yet? Higher Penalties Are Approaching
There are a lot of reasons for not filing your return on time. Whether you simply didn’t have all your documents ready, were worried about paying what you owed, or simply let the deadline pass you by, it’s important that you get your 2018 return filed within the next few days. Why? Because there are higher penalties headed our way soon. Here’s what you need to know.
Penalty Increase on June 14th
If you did not file or extend your 2018 return by April 15th, and you have unpaid taxes, a failure-to-file penalty will be added to what you owe. For now, this penalty is 5 percent of your 2018 taxes that were unpaid as of April 15th. This penalty is applied every month or part of a month in which your tax return is late.
However, once your tax return is more than 60 days overdue, the IRS applies a minimum penalty to your tax return. That penalty will be either $210, or 100 percent of your unpaid 2018 taxes—whichever is less. That minimum penalty will be applied on June 14th, after which the 5 percent penalty will continue to accrue each month.
How Big of a Penalty Increase Will You See?
Obviously, the answer to this question is going to depend on just how much tax you owe from 2018. But here’s an example: Let’s say you had $1,200 in unpaid taxes as of the filing deadline. The 5 percent penalty begins applying as of April 16th, which means you would currently have $180 in penalties, plus your unpaid taxes and interest. If you still file before June 14th, you’d only pay $180 in failure-to-file penalties.
However, if you delay longer, and don’t file until after June 14th, you would pay a minimum of $210, or an additional $30 in penalties. If you delay for even longer, you’ll continue to see those penalties (and your interest) piling up.
What Should You Do?
The short answer to this is to file immediately. One of our Provo tax accountants can work with you to get that return filed quickly, so that you don’t have to worry about accruing any more failure-to-file penalties. If you’re worried about being able to afford your taxes, it is still always best to file and send in any payment you can afford. Our accountants can help you to work with the IRS to set up a payment plan that will make your tax debt more manageable for you.
Penalty Relief Eligibility
There are certain individuals who may qualify to have their tax penalties waived. Individuals who have filed and paid on time, and have not had any penalties assessed against them in the past three years may qualify for a first-time penalty abatement. Additionally, if your failure to file was due to extenuating circumstances, rather than simple neglect, you could qualify to have the penalty waivered.
Contact us to get more information about penalty waivers. We’ll help you determine if you might qualify, and assist with requesting the penalty abatement from the IRS.
If you haven’t filed your 2018 tax return, we strongly encourage you to contact one of our Provo tax accountants and set up an appointment today. We’ll get your return filed quickly, so you can avoid those higher penalties on the horizon.