When it comes to taxes, procrastination can be costly. Many people delay filing their taxes due to anxiety about potential debts. However, ignoring the problem only amplifies it. Here's a critical figure to remember: 47.5%, plus interest. This represents the maximum penalty for failing to file, a sum calculated from the failure-to-file and failure-to-pay penalties based on your total tax liability.
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Filing but not paying leads to a 0.5% charge on unpaid taxes per month, capping at 25% of the owed amount. Moreover, unpaid taxes accrue interest, further increasing the debt.
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What happens if you’re expecting a refund but don't file? Fortunately, there's no penalty for this. But there's a catch: you risk losing your refund if you exceed the statute of limitations for claiming it. You have a three-year window from the original due date to file and claim your refund. For example, if you missed filing for 2020 taxes due on 4/15/2021 and are due a refund, you must file by 4/15/2024 to claim it.
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Don’t let fear or uncertainty lead to financial penalties. Contact our expert team at Verity CPA for guidance and support with your tax filing. Reach us at 808.546.5026 ext. 303 or email info@verity.cpa for professional assistance.