There is little doubt that tax season is probably a major source of stress for you. In addition to spending hours completing paperwork, you may also be forced to pay thousands of dollars at the end of this process. Not surprisingly, the complexity of tax season can be overwhelming, and you may need a couple of questions answered about the ramifications of what can happen if you are unable to complete this process by the deadline.
What Happens When You Miss The Filing Deadline For The Tax Year?
Life can be extremely hectic, and it is not uncommon for people to either forget or be unable to complete their taxes before the deadline. While you may think this places you in immediate risk of criminal prosecution or stiff fines, this may not always be the case. In fact, if you are owed money at the end of the year, you can file late without any major penalties.
However, if you are one of the many individuals that have a tax bill, the consequences for filing late can be more severe. In addition to paying a fine, your tax debt will also accumulate interest. The government charges a very high interest rate on this type of debt, which can cause this financial burden to rapidly grow if you fail to address it. Fortunately, you can usually request an extension, and this will minimize the penalties until you can complete the filing process.
What If You Can Not Provide Proof For Your Deductions?
There are many different deductions that you may be able to utilize to reduce your end-of-the-year tax debt. However, many of these deductions require individuals to have kept accurate financial records throughout the year, and this is something that most people fail to do.
Luckily, it is often possible to request a copy of your transactions with various companies and creditors. By doing this, you will be furnished with documents that outline your expenses or incomes from that organization, and you can then provide this to the government as proof for any deductions you are claiming. However, it should be noted that many companies can take several weeks to send out these documents, and you will need to request them early if you are wanting to make sure you file on time.
Tax time does not have to be a source of anxiety-inducing stress. Enhancing your knowledge about this process can give you a better sense of the steps needed to reduce penalties and repercussions for being late as well as how to get the documents for your deductions may make this entire process seem less intimidating. For further assistance, contact professionals, such as those from HBE Becker Meyer Love LLP.