[ad_1]
At the height of the COVID-19 pandemic, more than a million U.S. taxpayers had trouble filing their 2019 and 2020 tax returns on time.
For starters, lots of taxpayers and professional tax preparers got sick. Offices closed, sometimes making it harder to gather the necessary documents. And you couldn’t get the IRS on the phone. It was a tough time, and paying your taxes wasn’t exactly everyone’s top priority.
Good news: Now the IRS is refunding $1.2 billion in fines that it charged 1.6 million taxpayers for failing to file their taxes on time.
However, you have to file your overdue returns by Sept. 30 to qualify.
“Taxpayers who have yet to file their 2019 or 2020 federal income tax returns should do so soon, and we highly recommend they make every effort to file electronically,” said the Taxpayer Advocate Service, an independent organization within the IRS.
Taxpayers and businesses that paid fines for filing their 2019 and 2020 tax returns late will automatically get refunds, which should arrive by the end of September, according to the IRS.
If you have already filed your 2019 and 2020 tax returns, you don’t need to do anything except wait for your refund.
“This penalty relief will be automatic for people or businesses who qualify,” said IRS Commissioner Chuck Rettig. “There’s no need to call.”
The refunds apply to the IRS’ failure-to-file penalty. Taxpayers who file their returns late get charged a penalty of 5% of what they owe per month, up to a maximum of 25% of what they owe.
For example, if you owed $1,000 in income taxes, the fine would be $50 per month, and $250 after five months if you still didn’t file your tax return.
Why is the IRS doing this? To free up its employees to work on processing millions of backlogged tax returns that were filed earlier this year.
One final thing: Aside from the penalty for failing to file your tax return, there are completely different penalties for failing to pay your taxes. But the refund doesn’t cover those.
What Should I Do if I Haven’t Filed a 2019 and/or 2020 Income Tax Return?
You have to file your overdue returns by Sept. 30 to qualify for this penalty relief, and it’s recommended that you file electronically.
What Should I Do if I Filed a 2019 or 2020 Tax Return Late and Got Penalized?
You don’t have to do anything. Your refund should automatically arrive in your mailbox or bank account by the end of September.
Most taxpayers will get checks. Taxpayers who have online IRS accounts may receive direct deposits to their bank accounts.
What if I Got Fined for Failing to Pay My Income Taxes?
This refund doesn’t include failure-to-pay penalties. It covers only failure-to-file penalties.
Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder.
[ad_2]
Source link
