Motivator: What happens if you don't file your taxes on time

Author:
Publish date:

Death and taxes, it's been said, are life's certainties. So is Tax Day, which invariably shows up on April 15.

Despite that, the date always seems to get away from some filers. And the chore can feel tedious enough that others may feel tempted to skip the whole darned ordeal. But not hitting the IRS deadline can have serious consequences for your bank account and your credit score.

Yahoo Finance looked into what would happen if you just blew the IRS off and didn’t file this year. The story concluded that "you'd be better off filling out your tax return in crayon than sitting on your hands and letting the IRS have at you."

If you don’t send your return to the IRS by the April 15 deadline, you face a failure-to-file penalty, which starts at 5 percent of however much you owe. Late fees on what you owe start at 0.5 percent of your tax bill, which begin piling up on the first day you're late. Plus you’ll be charged a painful 3 percent daily – daily! – compounding interest on the unpaid balance. Your Uncle Sam has no sense of humor about these things.

Meanwhile, the Huffington Post republished an article from Credit.com that warns missing the deadline can result in a tax lien, which can seriously damage your credit. And if you don't pay your taxes, the IRS can file a notice with the credit bureaus, a big negative on your credit reports.

The Motley Fool reminds taxpayers who just can't git 'er done by April 15 that the IRS will give you an extension to file your taxes, but you still have to pay on time. The extension, known as Form 4868, can be filed electronically or on paper and gives you an additional six months to complete your paperwork. But you gotta pay your 2013 income taxes by April 15, even if you receive that extension. By filing for the extension, you will be able to ward off those costly late-filing penalties.

If you don't have the cash to pay your taxes, you're eligible to set up an installment plan with the IRS and should do so ASAP. There’s a $52-$105 application fee when you sign up for a monthly payment plan.

Now, get cracking!

Next Up

Related