Tax deadline 2022: what can happen if I have not sent the documentation on time?
The deadline to submit a tax return and pay any outstanding bills has passed, meaning that late filers could now be hit with a financial penalty.
Tax filing season can be a stressful time for many Americans and the IRS can impose financial penalties for late submission of returns or for late payment of taxes.
The deadline to submit a tax return and pay any outstanding tax payments was Monday, 18 April, although some states were granted extensions to mitigate for the disruption caused by winter storms and other natural disasters.
Even if you were not affected you can also apply for a six-month tax return deadline extension, although you will still have been required to submit any outstanding payments on time.
There are two main forms of financial penalties that the IRS can impose on those who miss the deadline: the Failure to File Penalty and the Failure to Pay Penalty.
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What is the Failure to File Penalty?
If you missed the 18 April deadline to submit a tax return, and you had not previously requested a deadline extension, you could soon receive a Failure to File Penalty from the IRS.
The tax agency says: “The Failure to File Penalty applies if you don’t file your tax return by the due date. The penalty you must pay is a percentage of the taxes you didn’t pay on time.”
This means that the size of the penalty you face will be based on your income level, with higher earners forced to pay more. The calculation is a combination of the amount of unpaid tax that you have to pay and the lateness of the tax return when you do eventually file it. The IRS also charges interest on top of the penalty fine.
If you submit your return more than 60 days late and you have an outstanding tax bill you will receive a Failure to File Penalty of at least $435, or 100% of the tax you were required to pay, whichever figure is lower.
What is the Failure to Pay Penalty?
Some filers may have submitted their return before the deadline, but were unable to pay their outstanding tax bill at that time. They could soon face a Failure to Pay Penalty.
The IRS says: “The Failure to Pay Penalty applies if you don’t pay the tax you report on your tax return by the due date or approved extended due date. The penalty you must pay is a percentage of the taxes you didn’t pay.”
However with this penalty there are other options with an online payment plan which allows late filers to pay off their outstanding balance over time with an instalment agreement.