Death and taxes. These are the two things that are certain in life. People can’t avoid death, but they believe they can avoid filing taxes.
You’ll be in a world of trouble if the latter is your belief. As a taxpayer, you have a duty to file a tax return.
Every April 15 will come and go like an annual tradition. What happens if you don’t file taxes by this date? Read on to learn what can happen if you fail to do so.
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The IRS Will Come Knocking
What happens if you don’t file taxes, you ask? The first thing you can expect if you don’t file your taxes is a summons from the IRS. This is their not-so-kind reminder that you need to take action.
Your employer informs the IRS if you earned money. Even if you don’t tell the IRS, it knows you owe taxes. The summons legally compels you to discuss this matter with the IRS.
Failing to file taxes can hit your wallet hard. You’ll receive a notice by mail informing you of the penalties you must pay.
A Failure to File Penalty is the first penalty you can expect to pay. It accounts for 5% of the unpaid tax obligation for each month your return is late.
You’re likely to get another penalty if you don’t pay the first one. It’s the Failure to Pay Penalty. This penalty will max out after five months.
On top of the penalties, you’ll have to pay interest. It’ll add up.
It starts to accrue on the due date of your tax return.
Lose Your State Tax Refund
If you’re due a state tax refund, you may lose it. The IRS may decide to levy your state refund. The IRS is within its right to seize your funds.
Don’t be surprised if this happens. This is one action the IRS can take to offset the federal taxes you didn’t pay.
Your Federal Payments
Uncle Sam wants your money, so the IRS will do what it needs to do to get it. The IRS can levy certain federal payments to get the money you owe.
This agency can go after your retirement annuities if you have any. It can also levy your Social Security benefits.
As you read, not paying taxes is a bad idea. It can affect your pocket and end up leaving you in a lot of tax debt.
Don’t let this be you. Tax relief services are available if you need help with a back tax issue.
Learning What Happens if You Don’t File Taxes
What happens if you don’t file taxes is one thing that every taxpayer should ask themselves. The best tax advice you can receive is to file your taxes on time. You don’t want to get in trouble with the IRS.
Make sure to explore the rest of our blog to continue reading more great articles.
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