The IRS has stated that people don’t file due to:
1. A change in their filing status resulting from the death of a spouse, divorce or other life-changing event;
2. Emotional or financial reasons; or
Unfortunately, failing to file a return can create additional problems, including the possibility of costing you money according to the IRS. Here are some things to consider:
1. Failure to file penalty – If you owe taxes, a delay in filing may result in penalty and interest charges.
2. Losing your refund – There is no penalty for failure to file if you are due a refund. However, you cannot obtain a refund without filing a tax return. If you wait too long to file, you may risk losing the refund altogether. In cases where a return is not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund.
3. EITC – If you are entitled to the Earned Income Tax Credit, you must file your return to claim the credit even if you are not otherwise required to file. The return must be filed within three years of the due date in order to receive the credit.
Regardless of your reason for not filing, file your tax return as soon as possible. If you are unable to fully pay any tax due on the late returns, do not let this hold you back from filing – payment options may be available. For more details, contact the IRS for more help. Keep in mind the last day to file your 2011 return electronically is October 15, 2012.
With a Taxbrain account, you can get all the free technical support you need to prepare your own taxes. Learn more, visit Taxbrain.com today.
Vincent Mangiapane, EA
Federal Analyst, Taxbrain