Sometimes, people end up filing late taxes just because of how difficult tax filing can be. In fact, about one-third of all Americans end up waiting until the last minute to file taxes. With that being the case, it is no surprise that a good chunk of them end up filing late, too!
So what exactly can you do if you have already filed your tax returns late? Read on to learn all about how to manage this tricky situation!
Some people are under the impression that if the tax filing deadline has already passed, then they might as well just not file taxes at all. In fact, it is much better to file taxes late than to not file at all. Even if it is unpleasant, you should try to finish your taxes as soon as possible, even if the filing deadline has already passed.
The Good News
A lot of the time, there is no problem at all with filing taxes late. Many people are actually owed money back from the government. In these cases, you will not be penalized for filing your taxes late.
On the other hand, if you owe the government money, then you are required to pay it within a certain time frame. If you wait until past the filing deadline to finish your tax returns, you will generally be subject to late fees.
There are a variety of fees that can apply to different people. However, there is one simple rule that covers most situations.
In general, the fee for late tax filing is 5% of the amount you owe the government per month that your tax returns are late. In theory, that could add up to a 60% increase over the course of a year. In practice, though, the government maxes out this fee at 25% instead.
However, there will generally be an interest fee on top of that. However much you owe the government, it will be growing at a rate equal to the federal short-term rate, plus 3% more per year.
At the end of the day, tax filing is something it is simply better to avoid. On the other hand, the system is set up for people who file past tax deadlines.
If you have filed taxes late, then there will likely be fees. But filing taxes late is not that unusual, and everything can be managed as long as you know what to do.
If you are still wondering, “What happens when I file taxes late?” then check out Efile360.com to learn more about what happens in late tax filings.
Be Prepared to Manage Late Taxes
We hope that you learned something helpful from this brief article on what happens when late taxes are filed. While nobody wants to end up in the situation, it is generally not the end of the world.
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