Millions of individuals and business owners did not file their tax returns in time for April 15th. Research by the IRS proved it is common for taxpayers to have unfiled tax returns in years when there is a variation in status. Examples of changes could be divorce or death of a spouse. Taxpayers also refrain from filing due to weak finances or emotional turmoil. There are those who have no reason other than dragging their feet.
Regardless of why you didn’t file in time, you can still file your return. It will be late and you won’t get a refund but the grounds for filing are far better than for not doing so. There are important considerations if you choose not to file:
You may permanently lose out on a refund. The taxpayer entitled to a refund is not penalized. There’s no way to get a refund if you don’t file. You are at risk of losing a refund if you wait too long. Taxpayers have three years to claim a refund if a return is not filed.
Taxpayers who don’t have to file a tax return must still do so if they want the credit from Earned Income Tax. This is a federal income tax credit that is refundable and available to employed individuals and families in the low income tax bracket. In order to encourage work and to counterbalance the weight of social security taxes, the 1975 credit legislation was approved by Congress. A refund in tax is given to taxpayers who claim and are eligible for credit when the EITC is more than the taxes due.
It is only when a return is filed that IRS may evaluate and collect unpaid balances according to the Statute of Limitations.
The law does not allow a refund check once the Refund Statute has terminated. The application of credits together with overpayment of anticipated or withholding taxes to underpaid years. Once a deadline is missed a fine for not filing may be imposed. You have a better chance of coming to an agreement with the IRS to lessen the fine or penalty the sooner you file.