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What to know about IRS tax rules and paying late

On Behalf of | Feb 5, 2021 | Tax Debt |

Washington taxpayers are required to pay any federal income taxes that they owe by April 15. However, taxpayers are allowed to request an extension to file their returns until Oct. 15. Take a look at the various penalties that you might face if you fail to meet a tax filing or payment deadline.

Interest will accrue on a past-due income tax balance

Interest will begin to accrue on a past-due tax debt the day after the original filing deadline passes. Furthermore, you might face additional penalties if you underpaid any balance owed throughout the year. Typically, your employer will withhold income, FICA and other taxes from each paycheck. If you are self-employed, you’re required to make quarterly payments to the IRS.

What happens if you don’t pay your taxes?

The IRS has the power to levy assets such as a bank account, car or home to satisfy a past-due balance. However, the government will generally allow you to enter into a payment plan to prevent this from happening. Entering into a payment plan could also remove liens against your property or any holds that may have been placed on your passport. A tax law attorney may be able to help you learn more about the potential benefits of an IRS installment agreement.

What happens if you don’t file a tax return?

In some cases, the consequences for failing to file a tax return are worse than for failing to pay a tax debt in a timely manner. If you don’t submit a tax return, the government can submit one on your behalf that doesn’t take into consideration any deductions or credits that you might be entitled to, adding to the amount you owe.

If you have questions about the tax code, it might be a good idea to speak with an attorney. He or she may also be able to represent your interests during an audit, in court or during any other interaction with the IRS.