If you have the April 15 tax deadlineThe penalties and interest are already starting to add up, but there are still actions you can take to limit the impact.
Experts say taxpayers should file immediately, even if they can’t pay the full bill, and pay as much as possible to avoid the stiffest penalties. Those who still have debt can apply for a payment plan to manage the remaining balance.
The IRS says most applicants receive immediate approval or denial when they apply for a payment plan online.
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Consulting a tax professional early can potentially help reduce the overall cost of taxes owed. (iStock)
“You can still file your return and at least eliminate the failure-to-file penalty, which can be up to 25% of the tax owed, with interest accrued,” said Mark Steber, chief tax officer at Jackson Hewitt Tax Services.
The tax authorities can impose multiple penalties, including failure to file, failure to pay and underpayment penalties, which are assessed separately and may accrue interest daily, Steber said.
He added that consulting with a tax professional early can help taxpayers navigate their options and potentially reduce overall costs.
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The IRS still requires payment by April 15 regardless of an extension. (Kayla Bartkowski/Getty Images)
“In many cases, the total cost is – inclusive taxesfines, interest and fees – will ultimately be higher than if you had sought help earlier,” says Steber.
“The worst thing you can do is ignore the deadline,” he added. “Many people think they will have to deal with it later, but that can lead to increasing fines and unnecessary financial risks.”
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Tax experts say the worst thing you can do is ignore the April 15 deadline and not pay immediately, as costs can quickly add up. (Getty Images)
By filing as soon as possible and exploring IRS payment options, taxpayers can regain control of their situation and minimize additional costs.
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Steber said taxpayers should view filing as part of a long-term financial strategy, not just a once-a-year obligation.
“Your tax return is one of your largest financial transactions every year,” he said. “Giving the right attention can pay off over time.”
