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This is what really happens when you don't pay your taxes on time

If you haven't filed your 2020 taxes yet, act now to avoid paying late fees on what you owe.

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Samuel Corum/Bloomberg via Getty Images
Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We earn a commission from affiliate partners on many offers, but not all offers on Select are from affiliate partners.

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

On TurboTax's secure site
  • Cost

    Costs may vary depending on the plan selected

  • Free version

    Yes (for simple returns** only)

  • Mobile app

    Yes

  • Live support

    Yes, costs extra

  • Better Business Bureau rating

    A+

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

On U.S. Bank's secure site
  • Rewards

    None

  • Welcome bonus

    None

  • Annual fee

    $0

  • Intro APR

    0% for the first 20 billing cycles on balance transfers and purchases

  • Regular APR

    15.24% - 25.24% (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

  • 20 billing cycles of no interest on balance transfers and purchases
  • 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

On Citi's secure site
  • Rewards

    2% cash back: 1% on all eligible purchases and an additional 1% after you pay your credit card bill

  • Welcome bonus

    No current offer

  • Annual fee

    $0

  • Intro APR

    0% for the first 18 months on balance transfers; N/A for purchases

  • Regular APR

    14.74% - 24.74% variable on purchases and balance transfers

  • 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 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

  • No welcome bonus, so you can’t maximize rewards during the first few months of card opening
  • Minimum cash-back redemption of $25
  • 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

Information about the Amex EveryDay® Credit Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
  • 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

    13.74% to 24.74% 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.

For rates and fees for the Amex EveryDay® Credit Card, click here

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.