The tax year 2020 final tax extension filing deadline was October 15th, and while some of you may have scrambled to make the tax deadline, a few of you may have missed it and are wondering what to do. If you did miss the tax filing extension deadline, read up on these 5 important questions and answers to help you figure out what to do next.
I missed the tax deadline. Should I still file?
Yes, you should still file your taxes as soon as possible. Even if your income was under the Internal Revenue Service (IRS) filing requirement of $12,400 single and $24,800 married filing jointly for 2020, you should still file your taxes if you had federal taxes taken out or are eligible for a refundable tax credit like the Earned Income Tax Credit since you may have a refund coming. Every year the IRS reports that they have close to $1 billion in unclaimed refunds.
How should I file my taxes?
IRS e-file is now closed, but you can still file your taxes by downloading TurboTax software and printing and mailing in your tax return. If you started your 2020 tax return with TurboTax, you have until October 29 at 9 pm PST to file your tax return online.
Will the IRS charge penalties for not filing by October 15th?
If you have a tax refund coming, there is no penalty for filing late. Penalties are calculated based on amounts due. If you file after the October 15 extended tax deadline and you owe, you will be subject to late filing fees.
If I owe money, will I be charged penalties and interest?
Unfortunately, you may receive three separate penalties on balances due on late tax returns as follows:
- Failure-to-file penalty
- Failure-to-pay penalty
The failure-to-file penalty can be the steepest as it starts out at 5% for each month the tax return is not filed and can go up to a total penalty of 25% of your balance due. If both the 5% failure-to-file penalty and the 0.5% failure-to-pay penalty apply in the same month, the maximum penalty you’ll pay for both is the 5% failure-to-file penalty.
Even if you owe money and can’t pay your taxes, you should still file to eliminate this penalty. In addition, you may be eligible for other payment plans and options like an installment agreement.
If I have a hardship, will I still have to pay penalties?
Unfortunately, you may have experienced hardship this year with everything going on. If you show the IRS reasonable cause for not filing on time, you may not have to pay penalties.
Additionally, if you were a victim of a federally declared natural disaster, the IRS may also offer relief in the form of extensions to make a tax payment or file your taxes in many cases. The IRS recently announced further extended tax deadlines for victims of Hurricane Ida. Be sure to check the IRS website for more information.
Hopefully, this puts your mind at ease and moves you closer to filing your taxes. Just because you didn’t make the tax deadline doesn’t mean you should forget about filing altogether. Who knows, you may even be missing out on a tax refund.
TurboTax Has You Covered
Don’t worry about knowing these tax rules. TurboTax will ask simple questions about you and give you the tax deductions and credits you’re eligible for based on your answers. If you have questions, you can connect live via a one-way video to a TurboTax Live tax expert with an average of 12 years experience to get your tax questions answered. TurboTax Live experts are available in English and Spanish and can review, sign, and file your tax return or you can fully hand your taxes over to them from the comfort of your home.