If you missed the April 15 tax deadlinepenalties and interest have already started to pile up – but you can still take steps to limit the impact.
Experts say taxpayers should file immediately, even if they can’t pay their entire bill, and pay as much as they can to avoid the heaviest penalties. Those who still owe can request a payment plan to manage the remaining balance.
The IRS says most applicants receive immediate approval or denial when they apply for a payment plan online.
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Consulting a tax professional early on can potentially help reduce the total cost of taxes owed. (iStock)
“You can still file your return and at least eliminate the failure-to-file penalty, which can be up to 25% of any tax owed, with compound interest,” said Mark Steber, tax director at Jackson Hewitt Tax Services.
THE IRS can impose multiple penalties, including penalties for failure to report, failure to pay and underpayment, which are assessed separately and can accrue interest daily, Steber said.
He added that consulting a tax professional early on can help taxpayers navigate their options and potentially reduce the total cost.
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The IRS still requires payment by April 15, regardless of the extension. (Kayla Bartkowski/Getty Images)
“In many cases, the total cost – including taxespenalties, interest and professional fees – end up being higher than if you had sought help sooner,” Steber said.
“The worst thing you can do is ignore the deadline,” he added. “Many people think they’ll deal with it later, but this can lead to escalating penalties and unnecessary financial risks.”
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Tax professionals say the worst thing anyone can do is ignore the April 15 deadline and not pay immediately, because costs can add up quickly. (Getty Images)
Filing a return as early as possible and exploring IRS payment options can help taxpayers regain control of their situation and minimize additional costs.
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Steber said taxpayers should view reporting as part of a long-term financial strategy, not just a once-a-year obligation.
“Your tax return is one of your most important financial transactions each year,” he said. “Giving it the right attention can pay off over time.”