You can face many burdens when trying to file your tax returns. Events may occur in your life that are unpredictable and that further strain your ability to file on time. Fortunately, your ability to receive a tax refund is not eliminated if you file a late tax late in 2018. If you need advice concerning a late tax filing, you should speak with an experienced Roseville tax attorney. The NewPoint Law Group, LLP is here to discuss how to receive a tax return if you file your taxes late.
Receiving a Tax Refund from a Late Filing
About three out of four taxpayers are owed a refund according to the Internal Revenue Service. If you are receiving a refund on your 2017 tax returns, you have until April 17, 2021 to be filed with the IRS before the statute of limitations on the refund expires. The three-year filing period begins from the original filing deadline. However, the three-year filing deadline is not the only deadline to worry about. Alternatively, you may have two years from the date the tax bill was paid to receive your tax return.
The due date rule controls the clock for late filings, especially for W-2 employees who have their taxes withdrawn directly from their paycheck. If you have already filed your taxes, you may also be able to collect any other refunds owed to you by filing an amended return. All amended returns that claim additional refunds must be filed with the IRS before the three-year deadline is over, unless you filed an extension.
Two exceptions exist to the three-year statute of limitations deadline on refunds:
- Taxpayers have seven years to claim a refund derived from deductions for bad debt or worthless securities
- The three-year year refund deadline does not apply to taxpayers who are unable to manage their financial affairs due mental or physical disabilities.
If you do not file your tax return by April 17, 2021, the U.S. Treasury will keep your tax refund. The IRS calls this process “excess collection.” The refund money which is kept cannot be sent to the taxpayer, nor can you apply it as payment toward a future tax year. Additionally, you cannot apply the refund to another year as an estimated payment.
If you do have a refund coming, there is no tax penalty for filing the return late, since penalties only apply to owed taxes. This includes no interest accrual on unpaid tax bills.
How to Extend Your Tax Deadline
Filing an extension with the IRS will push back the tax filing deadline and protect you from late filing penalties that can accumulate quickly. Penalties for late filing can rack up at a rate of five percent of the amount due with your return for each month that you are late. For example, if you owe $2,500 and you are three months late, you would be assessed a late-filing penalty of $375. Filing for an extension can eliminate this penalty.
If you file a tax return by the extended deadline of April 18, 2018, you will be afforded an additional six months to file your return. This makes your new filing date October 15, 2018. If you are expecting to owe money this year, you should know that an extension to file your taxes does not give you an extension of time to pay your taxes. If you believe you owe money to the IRS, you must estimate the amount due and pay it when you file your Form 4868. Late payments continue to accrue interest as long as they are still unpaid.
The Form 4868, labeled “Application for Automatic Extension of Time to File U.S. Individual Income Tax Return” is the form you need to submit to the IRS to receive an automatic extension on your filing deadline.
Reasons to Consider Filing Your Tax Return Early
While you can still receive a refund if you file your taxes late, there are also reasons to file your tax return early, including:
- You cannot receive your tax refund until you file your tax return. Therefore, if you still have an unfiled tax return, you should consider filing as soon as possible to receive your refund earlier.
- The statute of limitations for the IRS to run a tax audit on your return will not begin until you file your return. The sooner you file your return, the sooner you can let the clock run on the IRS’s possible tax audit.
If you are concerned about filing a late tax return, you should consult with an experienced tax lawyer.
California Tax Lawyers Here to Help You Receive Your Tax Refund
The Roseville and Sacramento tax lawyers at the NewPoint Law Group, LLP are here to guide you through a late tax filing. Our lawyers possess experience in various areas of tax law, including filing late tax returns for individuals and businesses. We have tirelessly worked for clients across the state of California and will work diligently to serve you. To schedule a confidential consultation, call us at 800-358-0305.