Out of more than 143 million taxpayers, you may think the IRS has enough to worry about and won't notice if you pay your taxes late or fail to pay at all.
But no matter how busy the IRS gets during tax season, you will be penalized if you don't pay taxes. Interest and penalties will begin to accrue on the outstanding amounts when you don't pay what you owe by the due date.
So if you anticipate not having your taxes done on time, here's what could possibly happen.
What happens if you don't file your taxes on time
If a significant amount of time passes since the tax deadline, and you owe the IRS money, it could potentially seize a portion of your wages until the debt is settled.
If you're expecting a refund, you risk losing the money the government owes you. Taxpayers must file within three years of the return due date, or else they forfeit any cash the IRS owes them. The same rule applies to claim tax credits such as the Earned Income Credit (EIC).
In 2022, the deadline to file your 2021 taxes is Apr. 18. If you haven't already filed, you should e-file today using an online tax filing program like TurboTax or H&R Block.
TurboTax
Cost
Costs may vary depending on the plan selected
Free version
For simple tax returns only. Not all taxpayers qualify. See if you qualify.
Mobile app
Yes
Live support
Yes, costs extra
Terms apply.
If you're concerned your tax bill may be steep, you can set up a payment plan with the IRS. The service fees for setting up tax payment plans range from $0 to $149 and will include interest on the balance until the payment is paid in full. Plus, there is a non-payment penalty, up to a maximum of 25% of the unpaid tax amount, for paying late. You can learn more about IRS payment plans on its website.
Other options to pay your taxes over time
Since the IRS charges a service fee and interest to pay your taxes over time, it may be more affordable to use a 0% APR credit card to pay your tax bill. If you use a card with 0% APR, you'll be able to pay your bill off over time with no interest during an introductory period of what's usually 12 to 20 months. Keep in mind that you do have to pay a one-time ~2% fee when paying your taxes with a credit card.
Here are a few of our best picks for 0% APR credit cards.
U.S. Bank Visa® Platinum Card
Rewards
None
Welcome bonus
None
Annual fee
$0
Intro APR
0% for the first 18 billing cycles on balance transfers and purchases
Regular APR
19.49% - 29.49% (Variable)
Balance transfer fee
Either 3% of the amount of each transfer or $5 minimum, whichever is greater
Foreign transaction fee
2% to 3%
Credit needed
Excellent/Good
See rates and fees and our methodology, terms apply.
Pros
- No annual fee
- Cell phone protection plan
Cons
- No rewards program
- 2% to 3% foreign transaction fee
- Balances must be transferred within 60 days from account opening
Citi® Double Cash Card
Rewards
2% cash back: 1% on all eligible purchases and an additional 1% after you pay your credit card bill
Welcome bonus
None
Annual fee
$0
Intro APR
0% for the first 18 months on balance transfers; N/A for purchases
Regular APR
18.99% - 28.99% variable
Balance transfer fee
For balance transfers completed within 4 months of account opening, an intro balance transfer fee of 3% of each transfer ($5 minimum) applies; after that, a balance transfer fee of 5% of each transfer ($5 minimum) applies
Foreign transaction fee
3%
Credit needed
Good/Excellent
See rates and fees. See our methodology, terms apply.
Pros
- 2% cash back on all eligible purchases
- Simple cash-back program that doesn't require activation or spending caps
- One of the longest intro periods for balance transfers at 18 months
Cons
- 3% fee charged on purchases made outside the U.S.
- Estimated rewards earned after 1 year: $443
- Estimated rewards earned after 5 years: $2,213
Amex EveryDay® Credit Card
Rewards
2X Membership Rewards® points at U.S. supermarkets on up to $6,000 per year in purchases (then 1X), 1X Membership Rewards® points per dollar spent on all other purchases
Welcome bonus
Earn 10,000 Membership Rewards® points after you make $2,000 in purchases in your first 6 months of card membership
Annual fee
$0
Intro APR
0% for the first 15 months on purchases from the date of account opening, N/A for balance transfers
Regular APR
17.99% to 28.99% variable
Balance transfer fee
N/A
Foreign transaction fee
2.7%
Credit needed
Excellent/Good
See rates and fees and our methodology, terms apply.
Pros
- No annual fee
- Competitive intro period on purchases
- 20% extra point bonus when you make 20 or more purchases in a billing period
Cons
- 2.7% foreign transaction fee
Bottom line
Paying your taxes on time is an essential part of keeping your personal finances in a healthy spot. Avoiding paying taxes can put you in a tough bind, and worst case scenario, end up in criminal charges.
So before the Apr. 18 deadline approaches this year, be sure to file your taxes on time, and if needed — file for an extension.
Read more
For rates and fees for the Amex EveryDay® Credit Card, click here
