Why You Should File Your Past Due Tax Return Now
Filing overdue tax returns can be a stressful, overwhelming process. If you’re tempted to put it off, consider the benefits of filing now.
Avoid Interest and Penalties
The longer your taxes go unfiled, the more money you’ll owe. The IRS charges a monthly failure-to-file penalty of 0.5% of the amount you owe until the debt is fully paid or the penalty reaches 25% of your tax debt. They also charge interest on the amount you owe.
If your debt remains unpaid, the IRS may take collection actions such as seizing your property and assets or garnishing your wages.
Claim Your Tax Refund
If you don’t file your return, you risk losing your tax refund. You have three years to file a return and claim your refund money. After three years, you forfeit your return. The IRS may also hold your current refund if you have one or more past due returns.
Maximize Your Return
When you don’t file your taxes, the IRS may file a substitute return. However, this substitute return may not give you all the deductions and credits you’re eligible to receive. You can ensure you’re taking all money-saving opportunities possible by hiring BC Tax to help with your return.
Prevent Loan Issues
When you take out a business loan, mortgage or another type of loan, you’ll need to provide lenders with copies of your filed tax returns. If you have unfiled tax returns, your loan approvals may be delayed or denied.