We all know that we cannot cheat death. Have you ever wondered what happens if you ever file tax return late? Or even worse, what if you never got the chance to file tax return at all? To be honest, I am way too scared to just find out what might happen if it failed to file my taxes. If you ever thought of flirting with this idea or if it pops up in your mind, be sure to check out with the penalties, which you might face straight from IRS.
Make It Clear Out There
Let’s just make this point clear first. You might come across so many videos on video channels which will talk about not paying the IT return. But, I would suggest you that you go and check the video namely I haven't filed taxes in 30 years! (It's not as fun as you think) just to get a fair idea. I would often recommend you, rather warn you, to not mess with the IRS. Based on the nature of actual return, you can either face issues like paying interest or even worse than that, penalties. So, during such instances, you can consider filing tax extension just to save your back now.
Whenever You File The Tax Return Late
Interests are here and likely to grow quite high whenever you are planning to file the tax return late. Interest on over-payments or even underpayments will run right from extended due date of the current tax return, which will be April 15th of every year possible. Even the regular interest is widely set by statute but the current underpayment incurs at around 1% premium rate, whenever compared with rate of interest, which will be paid by ITS on the refunds or the overpayments.
Pay Some More Interest
In general term, you can always expect to actually pay more interest than what you originally owe to IRS as your punishment, versus, if you end up paying way too much. If you ever owed refund, you might still earn interest on the said amount entitled to you but in a rather lower form of interest rate. It is more like getting loan right from bank versus how much you are likely to pay in the savings account. I would always recommend you to take help from the tax attorney while Filing US Tax Returns When Living Abroad.
Penalties are Waiting For You
The penalties, which might take place if you get caught of not filing tax return, might be categorized as failure to file or even failure to pay penalties. These issues will be directly assessed by the team from IRS, which is quite strict. Mainly determined as underpayment, these are mostly related to some intentional fault or negligence of tax payer.
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