If You Missed The Tax Deadline, Here’s Some Advice

The April 15th tax deadline has come and gone and if you missed filing your taxes with the Feds and/or state, you need to do something about it. Doing nothing is about the worst thing you can do.

If you owe money, the bad news, according to H.R. Block, is it too late to file and extension, and there's fines involved. But the sooner you file, the less the fines are.

If you are owed money, well, the IRS doesn't mind holding your money for you, and you have up to three years to claim it. But the sooner you file, the less a red flag your raising with the IRS for the future.

With your Michigan taxes, the state sends along this advice:

• Filing a return to claim an outstanding refund. Taxpayers risk losing their state income tax refund if they don’t file a return within four years from the due date of the original return. Go to mifastfile.org to learn more about e-filing.
• Filing a return to avoid interest and penalties. File past due returns and pay now to limit interest charges and late payment penalties. Failure to pay could affect a taxpayer’s credit score and the ability to obtain loans.
• Paying as much tax as possible. If taxpayers have to pay outstanding taxes but can’t pay in full, they should pay as much as they can when they file their tax returns. Payments can be made using Michigan’s e-Payments service. When mailing checks, carefully follow tax form instructions. Treasury will work with taxpayers who cannot pay the full amount of tax they owe.

Now, if you have a final tax bill and can't pay it, here's what the state says:

• Requesting a penalty waiver. Penalty may be waived on an assessment if a taxpayer can show reasonable cause for their failure to pay on time. Reasonable cause includes serious illness, a fire or natural disaster, or criminal acts against you. Documentation should be submitted to substantiate the reason for a penalty waiver request.
• Making monthly payments through an installment agreement. For Installment Agreements lasting for 24 months or less, taxpayers must complete, sign and return the Installment Agreement (Form 990). The agreement requires a proposed payment amount that will be reviewed for approval by Treasury.
• Filing an Offer in Compromise application. An Offer in Compromise is a request by a taxpayer for the Michigan Department of Treasury to compromise an assessed tax liability for less than the full amount. For more information or an application, visit michigan.gov/oic.

If you need more answers, just call the Michigan Treasury’s Income Tax Information Line at 517-636-4486.