The Internal Revenue Service (IRS) reminds taxpayers of the importance of filing and paying their taxes on time. It can be a hassle, but it is important to file up-to-date taxes to avoid harsher penalties. Late filing will incur penalties and losing future refunds.
In case the taxpayers owe money to the IRS, a penalty in various forms will incur. For instance, those who failed to file for the 2021 tax return and owe money will be charged 5% of their tax debt per late month, which would total 25%. The filer will also be responsible for paying interest and penalties related to their tax return. The IRS would let taxpayers apply for an instalment plan if they were cash-strapped at the time of their late filing.
In contrast, if the IRS owes taxes for 2021, the taxpayer can still get their payment, an average tax refund of $3,121, and their late filing penalties will be waived. The benefits can still be claimed as long as it has not been more than three years since the filing date for that year.