On the top of the COVID-19 pandemic, greater than one million U.S. taxpayers had bother submitting their 2019 and 2020 tax returns on time.
For starters, numerous taxpayers {and professional} tax preparers bought sick. Places of work closed, typically making it tougher to collect the required paperwork. And also you couldn’t get the IRS on the telephone. It was a tricky time, and paying your taxes wasn’t precisely everybody’s high 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 need to 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,” said the Taxpayer Advocate Service, an impartial group inside the IRS.
Taxpayers and companies that paid fines for submitting their 2019 and 2020 tax returns late will routinely get refunds, which ought to arrive by the top of September, based on the IRS.
When you’ve got already filed your 2019 and 2020 tax returns, you don’t must do something besides wait in your refund.
“This penalty aid might be automated for folks or companies who qualify,” said IRS Commissioner Chuck Rettig. “There’s no must 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 monthly, as much as a most of 25% of what they owe.
For instance, should you owed $1,000 in revenue taxes, the high-quality could be $50 monthly, and $250 after 5 months should you nonetheless didn’t file your tax return.
Why is the IRS doing this? To unencumber its staff to work on processing hundreds of thousands of backlogged tax returns that had been filed earlier this yr.
One last factor: Apart from the penalty for failing to file your tax return, there are utterly totally different penalties for failing to pay your taxes. However the refund doesn’t cowl these.
Continuously Requested Questions (FAQs)
What Ought to I Do if I Haven’t Filed a 2019 and/or 2020 Revenue Tax Return?
It’s important to file your overdue returns by Sept. 30 to qualify for this penalty aid, and it’s really helpful that you simply file electronically.
What Ought to I Do if I Filed a 2019 or 2020 Tax Return Late and Bought Penalized?
You don’t must do something. Your refund ought to routinely arrive in your mailbox or checking account by the top of September.
Most taxpayers will get checks. Taxpayers who’ve on-line IRS accounts could obtain direct deposits to their financial institution accounts.
What if I Bought Fined for Failing to Pay My Revenue Taxes?
This refund doesn’t embrace failure-to-pay penalties. It covers solely failure-to-file penalties.
Mike Brassfield ([email protected]) is a senior author at The PNW.