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On the top of the COVID-19 pandemic, greater than 1,000,000 U.S. taxpayers had bother submitting their 2019 and 2020 tax returns on time.
For starters, a number of taxpayers {and professional} tax preparers received sick. Workplaces closed, generally making it tougher to collect the mandatory paperwork. And also you couldn’t get the IRS on the telephone. It was a troublesome time, and paying your taxes wasn’t precisely everybody’s prime precedence.
Excellent news: Now the IRS is refunding $1.2 billion in fines that it charged 1.6 million taxpayers for failing to file their taxes on time.
Nevertheless, you must file your overdue returns by Sept. 30 to qualify.
“Taxpayers who’ve but to file their 2019 or 2020 federal revenue tax returns ought to achieve this quickly, and we extremely advocate they make each effort to file electronically,” mentioned the Taxpayer Advocate Service, an unbiased group inside the IRS.
Taxpayers and companies that paid fines for submitting their 2019 and 2020 tax returns late will mechanically get refunds, which ought to arrive by the top of September, in line with the IRS.
When you have already filed your 2019 and 2020 tax returns, you don’t have to do something besides wait in your refund.
“This penalty aid will probably be automated for individuals or companies who qualify,” mentioned IRS Commissioner Chuck Rettig. “There’s no have to name.”
The refunds apply to the IRS’ failure-to-file penalty. Taxpayers who file their returns late get charged a penalty of 5% of what they owe per 30 days, as much as a most of 25% of what they owe.
For instance, in case you owed $1,000 in revenue taxes, the high quality could be $50 per 30 days, and $250 after 5 months in case you nonetheless didn’t file your tax return.
Why is the IRS doing this? To liberate its staff to work on processing hundreds of thousands of backlogged tax returns that had been filed earlier this 12 months.
One last factor: Other than the penalty for failing to file your tax return, there are utterly completely different penalties for failing to pay your taxes. However the refund doesn’t cowl these.
Regularly Requested Questions (FAQs)
What Ought to I Do if I Haven’t Filed a 2019 and/or 2020 Earnings Tax Return?
You must file your overdue returns by Sept. 30 to qualify for this penalty aid, and it’s really useful that you just file electronically.
What Ought to I Do if I Filed a 2019 or 2020 Tax Return Late and Received Penalized?
You don’t need to do something. Your refund ought to mechanically arrive in your mailbox or checking account by the top of September.
Most taxpayers will get checks. Taxpayers who’ve on-line IRS accounts might obtain direct deposits to their financial institution accounts.
What if I Received Fined for Failing to Pay My Earnings Taxes?
This refund doesn’t embody failure-to-pay penalties. It covers solely failure-to-file penalties.
Mike Brassfield ([email protected]) is a senior author at The Penny Hoarder.
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