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What Happens if You File Taxes Late

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What Happens if You File Taxes Late

Our lives are busy, and it seems like we are always catching up on something or other. And we're always working toward deadlines – deadlines at work, deadlines to pay bills, deadlines to book concert tickets. Missing some deadlines might only result in a passing feeling of regret. Missing other deadlines, like the all-important tax filing deadline, can lead to severe penalties. The Internal Revenue Service (IRS) takes late tax filing quite seriously. Late filing of taxes means you missed the last possible day to file your annual tax return without receiving a penalty. There are a number of reasons for late filing, but most of the time it's accidental. The sooner you realize you missed the deadline the better, so you can pay your dues with minimal penalty. There are some instances where a taxpayer intentionally misses the tax filing deadline in order to keep the money owed for taxes in part or full, effectively defrauding the IRS, and this can lead to serious consequences, including jail time. The IRS penalizes late filing to deter taxpayers from missing deadlines.

Key Highlights:

  • The IRS has one annual deadline for filing taxes – April 15.
  • Failure-to-pay penalties add up every month you delay filing your tax return and paying your taxes.

Table of contents

What are the IRS tax deadlines?...Read more

What is the IRS tax deadline for freelancers and self-employed people?...Read more

Will I get penalized for filing taxes late?...Read more

How can I avoid failure-to-pay penalties?...Read more

I missed the IRS tax filing deadline – what do I do?...Read more

What are the IRS tax deadlines?

Sticking to the IRS deadlines each year is usually easier if you plan your taxes. Knowing the dates helps you get a clear idea of when you need to have the paperwork ready for a timely tax return filing. The tax return filing date for the 2022-23 fiscal year is April 18, 2023. Tax day can be a headache in any year, especially for freelancers, independent contractors, W-2 employees and self-employed individuals. They are used to sorting through heaps of receipts and IRS tax forms at the last moment, which can result in errors. Even W-2 employees, whose taxes are withheld and paid by their employer, need to file an annual tax return to declare their earnings. If a W-2 employee is also working as an independent contractor, they will need to file self-employment taxes like any other self-employed individual, if they earn more than $1,000 in self-employment taxes every year. Tax filing season is also a busy time for LLCs, sole proprietorships, S-Corporations and C-Corporations, whose finance teams work overtime to meet tax deadlines.
Image showing FlyFin's 3 ways to keep track of deadlines - make a calendar, remember, and download FlyFin. Useful for self-employed, 1099, and freelance workers. No mention of taxes.

What is the IRS tax deadline for freelancers and self-employed people?

The annual filing deadline is the same for every U.S. citizen, company or corporation. It's April 15 each year unless it falls on a weekend as it will in 2023. Then it gets pushed to the following business day. The deadline to pay annual taxes is also April 15. Self-employed individuals are also required to pay quarterly estimated taxes on:
  • April 15,
  • June 15,
  • September 15,
  • January 15 (of the following year)
These deadlines are for individuals and corporations who pay corporate or 1099 tax directly to the IRS. W-2 employees, on the other hand, have those taxes automatically deducted from their paychecks by their employers. The employer then pays these taxes on their behalf.

Will I get penalized for filing taxes late?

The IRS has a hefty penalty if you owe taxes and fail to file on or before the annual deadline. And, after you miss the deadline, the penalties can add up proportionately to the amount of time you delay filing and paying. The failure-to-file penalty for late filing is 5% of the taxes owed for each month that you are late on filing, with a cap of 25%. In addition, the IRS will charge you 3% interest on the taxes owed plus the federal short-term rate, which is 4% for 2022. There's also a failure-to-pay penalty, but you'll only pay the failure-to-pay fine if you file but don’t pay on time. Once you have failed to pay and missed the failure-to-file penalty, you'll only pay the latter. This is bad news because the failure-to-file penalty is ten times more than the failure-to-pay penalty. If you owe $2,000 in taxes and are four months late on filing, here's what can happen:
Alt text: Flyfin image explaining how to calculate IRS penalty for failure-to-pay and interest on unpaid amount for taxes owed. No mention of self-employed, 1099 or freelancer.
As you can see, the fees can be significant, so it's always better to file and pay your taxes on time and avoid any penalties.

How can I avoid failure-to-pay penalties?

Filed for an extension

You overpaid on taxes and need a refund

You are in the U.S. Army and are stationed outside the country

I missed the IRS tax filing deadline – what do I do?

If you are wondering – "Can I file for taxes after an IRS tax deadline?" – fear not. The best way to get back on track after you have failed to file or pay your taxes is simply to pay and file as soon as possible. Unfortunately, this will require you to navigate the labyrinth of IRS rules and regulations. A.I.-enabled tax filing tools like FlyFin can make this much easier. FlyFin helps you find all your deductions in minutes. You can also get expert CPA advice, 24/7, directly through the app to ensure you accurately pay and file your taxes. You can avoid paying penalties if you have a valid reason to file late. The IRS will probably cut you some slack if you experience a natural calamity or a death in the family.
Image displaying 3 exemptions from failure-to-pay penalties for US citizens living abroad, with business operations abroad or affected by natural disasters. #taxes #1099 #freelancer

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What’s FlyFin?

FlyFin caters to the tax needs of freelancers, gig workers, independent contractors and sole proprietors. But anyone can file taxes through FlyFin! FlyFin tracks all your business expenses automatically using A.I. technology. Then, our CPA team files a guaranteed 100% accurate tax return for you – to save you a couple thousand dollars and a ton of time on your taxes. Download the FlyFin app and have your taxes filed in less than fifteen minutes, saving time and more money on your taxes than last year, guaranteed.
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