Non-Filed Tax Returns

You know how it goes: the only things certain in life are death and taxes. Tax Day, April 15, comes around every year, and every taxpayer is expected to file their return in time. A delinquent, or late, tax return can can result in serious penalties.

By law, the IRS can assess penalties to taxpayers for both failure to file taxes and for failing to pay taxes they owe by the deadline. The failure-to-file penalty generally costs more than what it would to pay the taxes owed.

  • If you don’t file by the due date, the IRS will charge you a 5% per month penalty of the unpaid taxes for each month or part of the month that a tax return is late.
  • The 5% charge is combined of the failure-to-file penalty (4.5% of unpaid taxes) and the failure-to-pay penalty (0.5% of unpaid taxes).
  • As these penalties add up, interest will also accrue on any unpaid balance from the return’s due date until the day you pay the taxes in full.

Delinquent Interest Rates for Unfiled Indiana State Taxes

You are required to file an Indiana income tax return if you live in the state year-round, or if you live out of state and work in or receive income from Indiana. Your state income tax return is due on April 15, the same day as your federal return. The Indiana Department of Revenue has two types of penalties for failing to file by the due date:

  • Preparation by Department – 20% penalty
  • Fraudulent intent to evade tax – 100% penalty

Additionally, the Department of Revenue assesses an interest rate for underpayment of tax. The current and historical interest rates for Indiana can be viewed in Departmental Notice #3.

Watson CPA Can Help Filing Delinquent Tax Returns

The best course of action is to file your Federal and State tax returns and pay any taxes owed on time. If you’re a taxpayer in the Carmel, Westfield or Hamilton County area and you have unfiled tax returns, Watson CPA is here to help you sort through what to do next. Call us at 317-848-9938 to get your free consultation today!

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