Although the typical deadline for filing taxes is April 15th, the federal government postponed the due date for taxes to July 15 in 2020 due to the coronavirus outbreak. Even though this deadline has been extended, it’s possible you could forget to file your taxes or find that you are unable to pay what you owe. For independent contractors or business owners, this is surprisingly easy to do if you aren’t careful. There are many consequences for not paying your taxes, but there are also specific steps you can take to get back on track.
Consequences of Not Paying Your Taxes
There are many people who ask things like, “What happens if I don’t pay my taxes?” “What happens if you forget to pay taxes?” and “What happens if your taxes are late?” There is no simple, straightforward answer to those questions, but the reality is that you will face penalties.
If you miss the deadline, you won’t automatically be thrown in jail. In fact, the IRS will give you chances. However, your financial health will suffer. You will start developing fines, debt, interest, damage to your credit, and more. The IRS does not want to put you in jail, but this is the consequence for extreme cases.
Your Tax Debt Will Grow Continually
When you don’t file your taxes by the due date, you’ll receive a penalty of 5% on what you owe for five months. If you file your taxes more than 60 days late, it’s likely you’ll receive a much higher penalty.
If you don’t file or pay your taxes, you’ll receive those late fees as well as interest. The interest rate on taxes is determined by the government, but it’s frequently between 1-4%. In addition, the government can and will pursue unpaid taxes for up to ten years. If you don’t want your tax debt to become insurmountable, talk to someone at the Tax Relief Helpline immediately. The longer you wait to file taxes and pay them, the more debt you’ll have.
Damage to Your Credit Report
All of your debts are recorded on your credit report, and the IRS is no exception. Your credit score will decrease with any tax debt, and it will continue to plummet if you allow your government debts to pile up.
You’ll Receive Notices from IRS
The IRS will find out that you didn’t file your taxes fairly quickly. By the time you receive mail from the IRS, they will only give you 30 to 60 days before they take action.
However, it’s important to note that the IRS does not want to cause unnecessary trouble. They are not trying to trap you, but they will go to all lengths to get the money they are owed. If you openly communicate and respond to any requests, this will be a much easier process.
Unnecessary Time and Money Cleaning Up an Avoidable Mess
If you cannot pay the taxes you owe, it’s a scary feeling. However, there are many ways to keep your debts and fees as low as possible and prevent them from growing. If you try to avoid filing taxes, paying taxes, and any contact from the IRS, you will quickly and inevitably create a huge problem for yourself.
Fortunately, paying your tax debt is a fixable problem, so you don’t have to avoid it. Save yourself time, energy, and hundreds or even thousands of dollars by calling the Tax Relief Helpline.
Possible Jail Time
If you simply forget to pay your taxes or pay them late, you most likely don’t need to worry about going to jail. It is extremely rare for someone well-meaning to go to jail because of taxes. However, a problem arises if the government believes that you are purposefully trying to commit fraud. If you have large amounts of money that you are hiding, or there is evidence of additional crimes, going to prison for tax evasion is a very real possibility.
Three Steps to Take if You Can’t Pay Your Taxes
The first thing to understand is a difference between paying your taxes and filing your taxes. Filing is basically like a receipt for the government, and just consists of submitting the right paperwork. You can file your taxes through the IRS, a free service like Turbotax, or with an accountant.
Note, if you do not file for several years, the IRS will file your documents for you and assume you have no deductions. This could result in an eye-popping tax bill. Calling the Tax Relief Helpline can help calm your fears and set up an action plan.
If you can’t pay your taxes, here are the first three steps you should take:
1. File for an Extension
If the deadline has not yet passed (before July 15, 2020), you can file for an extension. This will give you a new deadline of October 1 with no penalties.
2. File Your Taxes
You can actually file your taxes at any time, even if the deadline has passed. You will still owe money and possible penalties, but you will prevent additional fees and interest.
3. Call the Tax Relief Helpline
You can call the helpline at any time–even before filing. You’ll speak with tax experts who know how to deal with the IRS. You’ll get a good sense of where you stand, and the variety of programs available for reductions and pay plans to get you back on track.
What Not To Do If You Can’t Pay Your Taxes
First, remember that filing your taxes is not the same as paying them. If you file your taxes, even if the deadline has passed, you can be confident that you are preventing much more damage to your future. If you cannot pay your taxes, don’t avoid the problem. Reach out for help.
Even though the government does not want to inflict harsh punishment on you, they also have a low tolerance for excuses. It is far too easy to allow your taxes to turn into a mountain of debt and destroyed finances if you do not file and pay your taxes on time.
Although it is scary to be unable to pay your taxes, you are not hopeless. You can pay off debt and become financially healthy again, especially with help from the Tax Relief Hotline. Call today for reliable tax relief information (888) 452-7841.