A missed tax deadline is one of those things that can quickly become worrisome and overwhelming. You’ve likely heard horror stories or advertisements of the IRS piling on extravagant penalties and interest or even showing up at your door to seize property. While these things certainly can happen, it’s not usually instantaneous. The good news is that when you miss a deadline, you are not out of options. From quarterly estimated payments to your filing deadline, there are steps you can take to help fix the situation and reduce the fallout.
In this guide, we will take a closer look at what to do if you find yourself facing a missed tax deadline. Learn what to do next and how you can get back on track.
Don’t Panic – But Do Take Action Quickly
Panicking is only going to cause your stress levels to rise more, and it’s not going to resolve the issue. The truth is there are millions of people who file or pay late every single year, which means the IRS has a long list of missed deadlines. They also understand that things happen, so they offer several tools and even some relief options you might be able to take advantage of.
But here’s the thing. The longer you wait, the worse the penalties might become. As soon as you realize you missed a deadline, you need to take action. The sooner you respond and start trying to fix the situation, the more likely you are to minimize the potential of penalties and interest.
Call your tax professional, or find a tax professional who can help you figure out your options and handle the processing to get your tax problem resolved. Remember not to panic – there are options available to you.
What Deadline Did You Miss?
The action that you need to take and the potential risks of the missed deadline can depend on what you missed. There are many different types of tax deadlines, and each one has unique consequences that go along with them. In addition, most consequences increase over time, which is why you don’t want to wait to take action.
These are some common deadlines:
- Federal Income Tax Return
- State Income Tax Return
- Quarterly Estimated Payments
- Business or Self-Employment Taxes
- Filing Extension Deadlines
The deadlines for each of these are often consistent so it’s less confusing. The deadline generally falls on the 15th of the month that things are due, although there are a few exceptions.
File or Pay as Soon as Possible
When you do miss something, you should take action as quickly as possible. A missed filing or a missed payment should be remedied quickly. If you missed a filing deadline, you need to get that filed quickly, even if you can’t pay the full amount owed right away. Getting the filing taken care of is at least a step in the right direction.
In addition to penalties for not paying, you will also have failure to file penalties, which are higher than failure to pay penalties. Filing your return is a sign of good faith to the IRS. You might also be eligible for penalty relief if you have a clean record or have an acceptable reason for the missed payment.
Pay What You Can
If you cannot pay your entire balance due, pay what you can. Pay as much as you can right away, even if it’s not the full amount. This will help reduce any interest or penalties because they only get applied to unpaid balances. There are different options for making that payment through different means.
The IRS does have some payment arrangement options that you might qualify for as well, which can help you get things taken care of in a timely manner without accruing big penalties or fees.
Consider Penalty Abatement or Relief
In the event that you have a hardship or a great compliance history, you might be able to work with your tax professional to request an abatement or relief option. The IRS has a first-time penalty abatement that is available as a one-time waiver for those who typically file and pay on time.
There is also a reasonable cause relief option that helps to cover situations or circumstances that are simply beyond your control (natural disasters, illness, serious hardships, etc.). This will require a written explanation and supporting documentation.
Keep an Eye Out for IRS Notices
If you miss a deadline, the IRS will eventually send out notices. These notices typically come via US mail. The notice will depend on what you missed, but these are some common ones:
- CP14: balance due notice
- CP161: notice of underpayment and interest
- LT11 or CP504: urgent collection notices
- CP2000: income mismatch or reporting errors
If you get a notice, don’t ignore it. That will only make things worse.
In addition, you can work to help prevent missed deadlines in the future. Working with a professional means they will always strive to keep you on track with your deadlines. You can sign up for IRS reminders or use tax software that offers alerts for key dates. Set yourself reminders to help avoid missing important due dates.
Oh – and don’t forget your state taxes. While we’ve primarily focused on federal taxes in this guide, your state will have its own rules, penalties, and deadlines as well. Many states mirror the IRS policies, but some are stricter. You need to be proactive if you miss a state deadline, too.
Missed a Tax Deadline? Let Katherine M Johnson, CPA, Help You Out
At Katherine M Johnson, CPA, we are here to help with all of your tax needs. Whether you have a tax problem, need to resolve tax issues, or you just need help staying on time, we’ve got you covered. Missing a tax deadline certainly isn’t ideal, but it can be fixable. There are resources available, and with our support and expertise, you might be able to set up payments, reduce penalties, and get back on track. Don’t ignore it! Take the first step of getting the help you need, and take a deep breath while you work on a resolution. Contact us today to get the help you need.
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