So, April 15th came and went, and your tax return is still sitting in your to-do pile. First, take a deep breath. You’re not alone, and more importantly, it’s not too late to fix it.
Here’s your step-by-step guide to getting back on track.
Step 1: File ASAP (Yes, Even If You Can’t Pay Yet)
The IRS isn’t known for its patience, but it does appreciate promptness. If you missed the deadline and owe taxes, file your return as soon as possible to minimize penalties and interest.
If you’re due a refund, good news: there’s no penalty for filing late. However, you must file within three years to claim it, or the IRS gets to keep your money.
Step 2: Understand the Penalties (Knowledge Is Power)
Here’s the breakdown:
- Failure-to-File Penalty: 5% of the unpaid taxes for each month your return is late, up to 25%.
- Failure-to-Pay Penalty: 0.5% of the unpaid taxes for each month the payment is late, also up to 25%.
If both apply in the same month, the combined penalty is 5%.
Interest also accrues daily on unpaid taxes, so the sooner you act, the better.
Step 3: Pay What You Can
Even if you can’t pay the full amount, pay as much as possible now. This reduces the total amount of interest and penalties.
The IRS offers payment plans, including short-term (up to 180 days) and long-term installment agreements.
Step 4: Seek Penalty Relief If Applicable
If you have a valid reason for missing the deadline—like a natural disaster or serious illness—you may qualify for penalty relief. The IRS offers options like the First-Time Penalty Abatement for those who have a history of compliance.
Step 5: Get Professional Help
Navigating tax issues can be complex. Working with a trusted tax professional ensures you’re making informed decisions and taking advantage of all available options.
Need Expert Guidance?
At Smith Patrick CPAs, we’re more than just number crunchers—we’re your strategic partners in financial success. Whether you’re catching up on late filings or planning for the future, our team is here to help you navigate the complexities of the tax world with confidence. Don’t let a missed deadline derail your financial goals.
More Information
If you have questions, contact us to discuss your situation.
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Angelo Ceko
Angelo Ceko is a Staff Accountant at Smith Patrick CPAs, specializing in bookkeeping, tax compliance, financial statement analysis, and reconciliation. He earned his Bachelor of Science in Accountancy from Webster University and was named one of the top 100 Business People to Know by St. Louis Small Business Monthly in 2023. Angelo is dedicated to providing timely, accurate financial insights that help clients make informed decisions.
About Smith Patrick CPAs
Smith Patrick CPAs is a boutique, St. Louis-based, CPA firm dedicated to providing personal guidance on taxes, investment advice and financial service to forward-thinking businesses and financially active individuals. For over 30 years, our firm has focused on providing excellent service to business owners and high-net worth families across the country. Investment Advisory Services are offered through Wealth Management, LLC, a Registered Investment Advisor.
