You should file your taxes on time, even if you can’t pay them on time.
As far as the IRS is concerned, failure to file and failure to pay are two different violations. For most people, April 15 is the annual deadline both for filing federal income tax returns and settling taxes owed to the IRS. Beyond that date, you will have to pay a penalty for late filing that is equivalent to 5 percent of your unpaid dues. The penalty accrues every month (until you file your income tax return, that is) and may not exceed 25 percent of your unpaid taxes.
Meanwhile, the failure-to-pay penalty amounts to half of 1 percent of your unpaid taxes. Penalty accrual starts the day after the due date for filing taxes and applies for each month (or part of a month) past the deadline. In the event that both penalties apply to you in any month, then the penalty for both is capped at five percent.
These penalties exist for the purpose of making sure everyone files and pays their taxes on time. Keep in mind that healthcare, Social Security, and income security benefits all rely on funding from tax dollars. You’ll do a great service to your country by filing and paying your taxes before the deadline.
If, however, you have been unable to meet your tax obligations, and the IRS is breathing down your neck, a tax representation firm can provide the tax relief you need.