If the IRS believes you’ve grossly understated your income-by 25% or more-it has an additional three years. This is known as the statute of limitations. Generally, the IRS can audit tax returns filed within the past three years. Starting the clock on the statute of limitations.You get two extra days because July 15 falls on a Saturday in 2023, so the deadline shifts to the following business day. If you haven’t yet filed your return for the 2019 tax year, you have until July 17, 2023, to file and claim a refund. For example, your 2019 tax return was due on J(the Treasury Department gave taxpayers three extra months to file that year due to the COVID-19 pandemic). That three-year window starts on the original due date of the return. By law, you have three years to file a return and claim your tax refund. File your tax return too late, and you could forfeit your refund.
However, there are two excellent reasons for filing your return as soon as possible. If you’re owed a tax refund, the IRS doesn’t charge a penalty for filing your tax return late.
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In month one, rather than assessing a 5% failure to file penalty plus a 0.5% failure to pay penalty, the IRS would apply a 4.5% late-filing penalty plus a 0.5% failure to pay penalty for a combined total of 5%. If both the failure to file and failure to pay penalties apply, the IRS reduces your failure to file penalty by the failure to pay penalty.įor example, say you owe federal income taxes and didn’t file your return or pay the amount you owe. Like the failure to file penalty, the late payment penalty is capped at 25% of your unpaid taxes. The failure to pay penalty is 0.5% of your unpaid taxes for each month or part of a month that you don’t pay your tax bill. What Is the Late Payment Penalty?Īnother penalty applies for not paying the total tax bill you owe by the due date. However, it’s capped at 25% of your unpaid taxes. The IRS’s failure to file penalty is 5% of your unpaid taxes for each month or partial month your tax return is late. That penalty is based on the amount of unpaid taxes and how late you file your return. The IRS charges a failure to file penalty if you don’t file your tax return or request an extension by the tax deadline-typically April 15. On Cash App Taxes' Website What Is the Penalty for Not Filing Taxes?
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