Tax deadline day is almost here, but millions of folks are nowhere near finishing up their returns.
Most will file for an extension. But some will simply blow off their tax responsibilities.
That's not a good idea. If you owe the IRS any amount and don't file and pay, you could end up owing even more.
Just ask the California car-wash owner who was four cents short on his tax bill. Four years later, he owed the IRS $202.35.
How did four pennies grow into a $200-plus tax bill? Penalties and interest.
To help taxpayers understand how much not paying their taxes or filing a return at all could cost them, the IRS put together a brief primer on penalties.
The key thing to note is that the IRS assesses two different penalties: one for not paying what you owe and another for not filing at all. And the nonfiling penalty is tougher than the nonpayment one.
That's right. While the IRS definitely wants your cash, the agency is more interested in knowing that you're meeting your filing obligation. I guess they figure that once they know where you are, they can always track you down and get your tax bill, along with penalties and interest.
So if you're thinking of not filing because you can't pay your tax bill, think again. Go ahead and file your tax return and then look for ways to come up with the money.