If you haven’t paid your taxes for 2021, here are some steps you can take:1. **Gather Your Documents**: Collect all relevant documents including your W-2s, 1099s, and any other income records for 2021.2. **File Your Tax Return**: Even if you can’t pay, it’s important to file your tax return to avoid additional penalties for failure to file. You can file your return online or by mail.3. **Consider Payment Options**: If you owe taxes and can’t pay the full amount, you have options: – **Installment Agreement**: You can apply for a payment plan with the IRS to pay your taxes over time. – **Offer in Compromise**: In certain circumstances, you might qualify to settle your tax debt for less than the full amount owed.4. **Check for Penalties and Interest**: Be aware that failing to pay taxes can lead to penalties and interest. The IRS may charge a failure-to-pay penalty which can increase your total amount owed.5. **Consult with a Tax Professional**: Consider speaking with a tax professional or accountant for advice tailored to your situation.6. **Stay Informed**: Keep up with IRS communications. They may send you notices about your tax debt, and it’s important to respond promptly.Taking action as soon as possible can help minimize penalties and interest, and get you back on track.

In this article, I will provide you with some guidelines on what to do if you have not filed your taxes for 2021. I will explain the steps you need to take and the potential costs involved.

Getting Started on Rectifying the Matter

If you have not filed your tax return at either the federal or state level, you need to rectify the matter as soon as possible. The government always wants to recover any amount owed to it, so you can resolve this issue. It is always better to file a late tax return than to not file at all!

Delaying Tax Payments

If you owe the government an unpaid amount of taxes, the longer you delay in filing your tax return, the more fees and penalties you will incur. The Internal Revenue Service (IRS) imposes a penalty for failing to file your return that costs 5% of the unpaid tax amount you owe monthly, up to the maximum unpaid taxes. And if your tax return is more than 60 days late (as is the case here), the penalty is a minimum of $435 or 100% of the tax owed on your return, whichever is less.

Penalties and Interest

If you have filed your tax return but did not pay the amount of taxes owed, the IRS will impose a penalty for non-payment in the form of interest on the unpaid tax amount: 0.5% monthly, up to 25%. The maximum amount the IRS can impose for non-payment and non-filing is 47.5% of the unpaid tax amount.

State Taxes

In addition to federal taxes, you can also file your state tax return after the deadline. If you live in New York, the penalties in that state are similar to those imposed by the IRS: 5% of the unpaid tax amount monthly for failure to file the return, up to 25%, and a penalty of 0.5% monthly, up to 25%, for failing to pay on time. The penalty amount will be $100 or the total amount of taxes due on your return, whichever is less, if your New York state tax return is more than 60 days late.

How to File Your Tax Return

If you want to file your tax return for the previous year online, you will have to go to a registered tax preparer and will need to pay for that service. However, you can use affordable tax preparation software that will also file your tax return online. Otherwise, you will have to file your tax return the traditional way: print it, sign it, and mail it to the IRS and the state. Make sure to use the correct form for that tax year!

Requesting an Extension

If there is a reason that prevents you from filing your tax return on time in the future, you can request an extension from the IRS. This may save you a lot of hassle that results from late filing, and you will not be required to provide an explanation to the government.

Good luck!

If you have any questions about money, Christine is here to help. Submit an anonymous question, and it may be answered in a future article.

Sources:

IRS. “Failure To File Penalty.”

IRS. “Collection Procedural Questions 3: Question: Will I be Charged Interest and Penalties for Filing and Paying My Taxes Late?”

IRS. “Failure To Pay Penalty.”

New York State Department of Taxation and Finance. “Interest and Penalties.”

IRS. “IRS Free File: Do Your Taxes for Free.”

Source: https://www.thebalancemoney.com/how-to-file-tax-returns-for-previous-years-5218128

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