Tax professionals emphasize the importance of filing a tax return even if you can't pay the owed amount. The IRS prefers working with individuals to address their tax situation. Filing provides the IRS with information needed to potentially avoid penalties and interest charges. Taxpayers can request extensions or payment plans to manage their tax liabilities. Failing to file can lead to severe penalties, including wage garnishment or property liens, making timely communication with the IRS crucial for tax season.
The IRS wants to work with you, said Tom O'Saben, director of tax content and government relations at the National Association of Tax Professionals.
Filing a return without paying taxes owed in full is preferable to not filing, as interest will accrue but be more manageable than fees for not filing at all.
If you don't file a return or ask for an extension, then interest and penalties begin to accrue immediately, making timely filing essential.
The worst case scenario is that you don't file and end up being liable for penalties later on, said Emily DiVito.
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