What is penalty for not paying taxes

If you expect to receive a tax refund, there is no punishment for not filing your federal return, but you are depriving yourself of the funds that the IRS has set aside for you. However, Steber says that late filers should be aware of their home state's tax code. Some states penalize late filers, so it is best to read up on your state tax authority's rules before letting the deadline go by.

Taxpayers have three years to claim their refunds for a given year before they expire. Whether or not you are expecting a return, the best course of action is to file your taxes as soon as you are able to.

Sign up now: Get smarter about your money and career with our weekly newsletter. Don't miss: Do you owe taxes on your bitcoin? The penalty goes down to 0. The IRS may remove abate this penalty if you can show that you had reasonable cause for not paying your taxes on time, or if you have a prior history of filing and paying your taxes on time. Learn how to address IRS penalties. The IRS grants four types of penalty relief, but many taxpayers don't ever ask.

Learn how to request penalty abatement from the IRS. Learn about IRS first-time penalty abatement, a little-known option for certain penalties.

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