Filing Taxes Late

Before we start off with the solutions and implications of late filing of taxes, it is necessary to know some important deadlines and dates:

• January 5, 2011: Date from when forms can be filed at Intuit Electronic Filing Center (start filing on this date).
• January 13, 2011: IRS starts the processing of the forms.
• April 18, 2011: The first deadline for filing the returns. After this date your return or income tax would be penalized.
• April 22, 2011: Resubmission dead line (that is, forms that have been rejected due to mistakes or other reasons can be resubmitted)
• October 17, 2011: This is the final deadline for filing the returns, but is applicable for people who have been granted extension.
• October 21, 2011: Final resubmission dead line and the date after which e-filing is not possible.

There are several implications, fines and penalties which are imposed on the tax payers in cases where the taxes are not paid in full or the return is filed late or taxes are paid late. On the whole, it is largely recommended that one pays the taxes in full and the return in filed on time. In some cases, where a tax payer is not able to file in time, due to reasonable cause, the Internal Revenue Service (IRS) provides a certain extension for filing tax. Extension in such cases is to be supported with sufficient cause and proof as per the instructions of the IRS. In cases where availing the extension is not possible, the IRS makes sufficient provisions for late filing. It must be noted that any kind of late filing, without notice is penalized. The month of January is the best, also the safest time, to commence the processes as it gives you a decent time margin.

Implications of Late Filing of Taxes

There are several implications of filing the tax late. The IRS always enforces a 4 step procedure to enforce implications against the people who are late in paying taxes.

1. The first step to enforcement is the 3 different dates that signify the deadline till which the forms can be filed with or without extension. The last dead line is October 21 after which IRS officials proceed to enforce the step two.
2. After the dead line is breached, the IRS sends a Notice of Tax Due and Demand for Payment to the person. In this step, the IRS can ask the tax payer to pay the taxes and the penalties by suggesting several financial remedies. The officials may go to the extent to requesting the tax payer to get a loan to pay taxes.
3. The next enforcing step by the IRS is the enforced collection of taxes, and it involves levying or garnishing income, wages or other accounts of the tax payer.

There are several further implications that the IRS might initiate in collaboration with the Department of Justice, these measures are quite harsh and to some extent mortifying.

Penalty for Filing Taxes Late

The following is a structure of penalties, imposed for late filing, online or in material forms. Note that this penalty structure may change or may not be applicable for your case, hence it is always better to confirm. Now, when it comes to late penalties, there are three different probable cases that can occur. Here's an explanation to all the three cases:

• Return Filed, Tax Not Paid Fully: When the return is filed and the taxes are not filed fully, a penalty of 0.5% of the tax owed for every month is imposed. The total percentage of penalty can go up to a limit of 25%.
• Return Not Filed and Balance Not Paid: In such instances, the fine increases and totals up to 4.5% to 5% of the tax owed, plus 0.5% for every month. The late filing penalty is imposed for 5 months, but can go beyond that. In cases where no due is paid even after 5 months, the penalty is continued till it reaches the 25% limit after which the total penalty goes up to 47.5%.
• The IRS permits an installment payment of taxes. In such a case the Form 9465 is filed and 0.25% of unpaid tax is imposed as a penalty.

Please check all the provisions relating to the extension and also the installment payment of you plan to avail any of those. Refer to the IRS website in case if you have any difficulty or query. Also avoid late filing, make haste in January itself.