(NEW YORK) — During tax season, many rush to get their taxes filed in time for Tax Day. But what happens if you file your taxes late and you owe money?
Eric Smith of the Internal Revenue Service says there’s a penalty for not filing on time.
“Most of the time it’s five percent based on the unpaid balance for each month or part of a month that your return is late,” Smith says.
That penalty starts right after the filing deadline.
“Even just within a few days after April 15th, you’re already at the 5 percent level [for] May 15th then it moves up to 10 percent,” he says.
So let’s say your tax bill is a thousand bucks. That becomes $1,100 a month after the deadline if you don’t file.
The lesson from this? Janice Hayman, a certified tax accountant, cautions, “Don’t be the ostrich. Don’t hide.”
Hayman says that you should file the return in a timely manner, and then talk to the IRS.
“They are very much aware of everybody’s struggles, and they have installment agreements that you can enter,” she says.
If you’re not ready by April 15, you can file an extension. But you will still face a penalty if you don’t pay on time.
Copyright 2013 ABC News Radio
Erin McClam, CNN
Susan Scutti, CNN
Paul Menser, BizMojo Idaho
Matt McFarland, CNN