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    Sorry, Filing Your Taxes On Time Really Does Matter

    Welcome to Tax Season 2019! It's complicated and full of scammers.

    Whether or not you've actually filed your extra-complicated 2018 taxes, you've probably always wondered what would happen if you just DIDN'T, right?

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    Before we get to that, let's talk about what WON'T HAPPEN if you miss the April 15 deadline: You won't get arrested, and you won't have to wire money over the phone to avoid getting deported or foreclosed on. But there's a common tax collection scam that affects millions of people each year that makes it seem like you will.

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    A good rule of thumb for bureaucracies like the IRS: They're not going to call you on the phone! Even if the caller ID says it's them. If you get a call from a person or robot saying they're "with the IRS" and they're putting a warrant out for your arrest because of taxes you owe, or making some other immediate threat, unless you pay them right then and there on the phone, that's not our beloved government entity calling! The IRS has months of processing and committees and auditors and paperwork and envelopes for stuff like that. Hang up, and go call an accountant instead.

    If you're still not sure if something’s legit, check out these five ways to spot a tax scam from the IRS itself. And if you want to see what it takes to actually get charged with a crime of tax evasion, see more here.

    Now that that's settled, let's get into what could happen if you miss the April 15 filing date. The tl;dr is this: Penalties for not filing/e-filing your taxes are higher than the penalties for not paying what you owe, or not paying on time. Unless you're getting a refund.

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    Here are three basic things to note:

    1. The failure-to-file penalty is 5% of the taxes that you owe for each month you don't file, up to 25%.

    2. If you file but don't pay what you owe, the penalty is 0.5% of what you owe for each unpaid month, up to 25%, plus interest.

    3. If you can't file on time, you can file an extension for free (until April 15). You'll still likely face failure-to-pay penalties for those months, but they're smaller than the failure-to-file penalties.

    4. If you can't pay in full on time, you can set up a payment plan.

    (Want to bounce now and go file? Smart. Good idea. Find a filing service at NerdWallet.)

    If you're owed a refund, there's no penalty for filing late. You'll just have to wait longer to get your refund.

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    And if you wait over three years to file, you'll miss out on your refund altogether.

    Starting this year, you’ll also avoid failure-to-file penalties if you pay 85% of your owed taxes through paycheck withholding or quarterly estimated tax payments. (Previously you needed to pay 90% through those methods to avoid the fees.)

    ***But remember, just because you got a refund last year doesn't mean you will get one this year. Things have changed! The only way to know for sure is to complete your filing for the year. ***

    But remember, just because you got a refund last year doesn't mean you will get one this year.

    Twitter: @iamjermainew

    Tax law has been reformed and things have changed! The only way to know for sure is to complete your filing for the year.

    So as far as federal taxes go, it's better to be safe than sorry and to get your goods in on time.

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    As for state and local taxes, it's even more complicated!

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    And the consequences for not paying your state taxes can be severe, including suspension of your driver's license, business license, or fishing license in some states. There's even something people refer to as a "Public Shame List" that shows businesses and individuals who owe state and local taxes in places like Wisconsin, California, and Georgia!!!

    In conclusion: Get thee to a tax preparer. Or get an extension ASAP.

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