If you missed the tax deadline on April 15, you might be feeling some pressure. The penalties and interest have already started accruing, but there are still ways to lessen the blow.
Experts recommend that taxpayers file their returns as soon as they can, even if they can’t pay the entire amount owed. Paying whatever you can will help minimize penalties. If you owe money, it’s also possible to apply for a payment plan to break up the remaining balance.
One of the advantages of filing early is that it ensures your return is processed, which can help protect you from identity theft—something many of us worry about these days.
According to the IRS, most people who apply for a payment plan online get an answer right away, either approved or denied. Mark Steber, a chief tax officer, points out that filing even a partial return helps avoid severe penalties for not filing, which can accumulate to 25% of unpaid taxes. There are multiple penalties for things like underreporting and nonpayment, which can add up quickly.
Consulting with a tax professional early in the process may be wise. They can help taxpayers explore options that might save them money in the long run.
Filing taxes early can sometimes lead to quicker refunds, which means you can start putting that money to use sooner rather than later. Steber also mentions that the cost of penalties, interest, and any professional fees will likely surpass what you would have incurred had you sought assistance sooner.
Ignoring the deadlines, he warns, is not the way to go. Many people think they can just deal with it later, but that can create unnecessary financial complications.
Filing as early as possible and taking advantage of IRS payment options can help you manage your situation more effectively and reduce additional costs. It’s not just another chore; it’s part of a broader financial strategy that could have long-term benefits. After all, your tax return is among the most significant financial actions you take each year.
