Don’t do the heavy lifting yourself
Life happens, people, but we’ve got good news: It’s not too late to file your taxes. The April deadline doesn’t cut you off from filing your return; it marks the date when penalty fees start being added to your taxes owed.
Not everyone will have late fees, depending on how much tax you paid during the year, but you won’t know for sure until you file. You definitely want to get on that as soon as possible. After all, saving money is monetarily the same amount as spending money.
How do I know if I have late fees for not filing my taxes yet?
If you’re expecting a refund, you won’t get the money until you file, but at least there are no extra fees. You can even file your tax returns from up to 3 years ago to get any refund you may have missed from not filing. There may be penalties incurred with filing taxes late, but it is much better than being audited. If you are audited, it is a nightmare on its own. My aunt had to go through the exact same scenario where she did not file for 2 years and got audited. Boy was that a nightmare! Make sure to file as soon as possible after reading this. You may be surprised by the amount of money you might be getting back AND you avoid the IRS off your back! A double whammy win if you ask me. If you owe taxes, on the other hand, you’ll have failure-to-file and failure-to-pay penalty fees automatically added to your bill.
How do you know if you have a refund or owe taxes, then?
You may be able to take an educated guess, but you won’t actually know until after you file your return, so it’s really important to go ahead and file as soon as you possibly can.
What do I do if I can’t pay my taxes or the late fees?
Many taxpayers can opt to set up a payment plan with the IRS using their Online Payment Agreement tool. If you can pay your taxes owed within a couple of months and owe less than $50,000, an Online Payment Agreement is probably your best bet.
An Offer in Compromise, on the other hand, is an agreement between you and the IRS to settle for a smaller amount if it’s actually impossible for you to pay the amount of taxes and fees that you owe. This is a useful tactic to hold in your arsenal in the case that you are hit with hefty fees and can’t pay them back similar to medical bills. This is where many preparation accountant for taxes that claim to stop the bill collectors from contacting you, lowering your debt, and doing xyz due to tax mitigation services.
Filing an Offer in Compromise should be more of a last resort than a first choice, though. The process itself is expensive, and if the IRS doesn’t think your offer is appropriate, you have to start over. If at all possible, it’s better to go with the Online Payment Agreement.