If you haven’t filed your taxes or requested an extension, hope is not lost. April showers will still make May flowers, spring won’t stop springing, and the tax man isn’t about to kick down your door and seize all your property; at least, not yet.
My first advice: Don’t panic. While you’ve had, presumably, 4 plus months to file since receiving your W-2s, you’re still one among millions of Americans who missed the deadline.
Step 1: Make sure you need to file a tax return. In general, you should assume you do; however, click here for a guide on determining your eligibility.
Step 2: If you live in certain parts of New York, New Jersey, Connecticut, Rhode Island or Maryland, you may already be able to avoid penalties through the IRS’ tax relief in disaster situations program. Likewise, if If you can prove other reasonable cause for your failure to file, the same applies. Contact the IRS to check your eligibility.
Step 3: Most people won’t be so lucky to stop at Steps 1 or 2, so again, you’re not alone. The most important thing to do now is to do something. The longer you wait, the worse the result. If you’re owed a refund, simply file your taxes as soon as possible; you may receive a small failure-to-file fine and will accrue less interest on the amount your owed, but that’s pretty much the much worst of it.
Step 4: If you do owe tax payments, it’s even more important to act immediately. The longer you wait, the stricter the fines, which increase with each month passed. The more you try to hide, evade, neglect or commit fraud, the worse the penalties. The IRS can be intimidating and aggressive under certain circumstances. Consult a tax professional if you think you’re on thin ice. If you made an honest mistake, or can’t pay but want to, the IRS isn’t a four-letter word. If you’re upfront with them, they’ll help make an arrangement that fits your financial needs. Consider using free services like the Taxpayer Advocate Service to negotiate with the IRS.
JDKatz, P.C. is a full-service law firm focused on tax law and estate planning. We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys.