If you haven’t already filed you tax return, experts at Economic Strategist say you may owe Uncle Sam a pretty penny.
“When you fail to file on time, which means by April 15th, there’s a penalty. It’s up to a twenty-five percent penalty.” said Matthew Jennings, IRS Enrolled Agent at Economic Strategist.
Jennings says a lot of people miss the deadline. In fact, USA Today reports only two thirds of the expected 150-million individuals filed their returns as of April 6th, and even though you may have filed for an extension on the 15th, you still have a deadline to meet.
“When you fail to pay on time, there’s going to be a penalty for failure to pay by the 15th, so even though, you file an extension for the later date, you’re still going to pay a penalty for not paying by April 15th.” said Jennings.
Experts say when you file your taxes, the clock starts ticking, and that tab is the Statute of Limitations.
“The IRS has a ten-year statute of limitations to collect on a tax debt. For example, the tax debt for 2018 which, you file in 2019. The IRS has ten years after that to collect. If you don’t file, or if you file late, then that has just pushed that time clock out a little bit further.” said Jennings.
Some people may avoid filing their taxes because of the money they could owe, which is why it’s important to file on time and avoid interest and additional fees that rack up after Tax Day.
“When you file on time the IRS considers you compliant, so they are all about compliance. The US tax system is a self-reporting tax system, so they really want to stress upon people the filing and the reporting of income, because otherwise they won’t know, and otherwise, the system would just go awry.” said Jennings.
If you don’t file your 2018 tax return and get caught, it could cost you some jail time.