What Are Unfiled Taxes?
Filing taxes each year is one of the most complex financial responsibilities for wage earners. Small-business owners and 1099 employees often face additional complexity.
While some taxpayers anticipate refunds, others face large tax bills that create financial strain. Avoiding filing out of fear of owing taxes is one of the worst mistakes you can make.
Consequences of Not Filing
Failing to file your taxes can result in severe penalties. Key consequences include:
- Immediate penalties after the April 15th deadline
- 5% penalty per month for failing to file, up to 25%
- Smaller late-payment penalties (0.5%–1% per month) if you file but cannot pay
- IRS notices CP515, CP516, CP518, and CP515B until filing is complete
Refunds & Filing Tips
Even if you haven't filed for a tax year, you may still be eligible for a refund. However, you must file within three years of the return's original due date, or you forfeit your refund.
Filing early, months before the deadline, gives you more time to pay any taxes owed while avoiding penalties and ensures a smoother process overall.
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