Many American consumers, for one reason or another, don’t pay their taxes. Either they can’t afford to pay, they forget to pay or simply don’t believe that they should pay. But here’s the question; what actually can happen if you don’t pay your taxes?
That answer isn’t exactly specific, by any means. For many Americans it means a lot of guilt, to be sure, but in most cases it doesn’t automatically make someone a criminal in the eyes of the law. The problem however is that the longer it takes you to actually start paying those taxes and make things right, the more it will end up costing you in the end.
The good news is that, when it comes to working with the IRS if you’re behind, they’re actually pretty easy to deal with. Of course, you have to make the effort to contact them and show that you want to make things right and, even if you can’t pay the taxes they owe, there are still some steps that you need to take.
Many consumers believe that they will be able to avoid a large tax cost if they don’t file their tax return and, while that might be true in the short term, it will make a big problem even bigger in the long term. Along with late fees on the taxes that you already owe, failure to file fees and interest are adding up month after month, year after year.
Keep in mind that there’s a difference between filing your taxes and not paying them and not filing taxes at all. If you don’t file your federal tax 1040 form the IRS can charge you 5% of your unpaid taxes every single month that your return is late, up to a maximum of 25% of your total tax bill. Also, after 60 days, you’ll be charged either $135 or 100% of the taxes you owe, whichever of those two amounts of money is less. If you have a medical emergency or other situation that keeps you from paying, you need to document it so that you can possibly avoid these fees. You can also apply for an extension so that you can file your taxes late, up to the 15th of October.
