We hear questions like this every tax season... Should I file my taxes this year? What happens if I don't file taxes?
The simple answer is: Yes, you should definitely file your taxes. Every year. Period.
The long answer is a little more convoluted.
Good news first: If you are due a refund and do not file your tax return by the deadline (usually April 15 of the following calendar year), then you have three years to file your taxes to claim your tax refund before you forfeit your right to claim that money. No penalties are assessed in this scenario.
Bad News: If you owe taxes and do not file your tax return or pay the taxes owed by the deadline, then you immediately begin to be assessed penalties and charged interest. There is a penalty charged for not filing your tax return on time, a separate penalty for not paying taxes owed on time, and interest on the original taxes owed plus penalties begin accruing immediately. It make take some time for the IRS to contact you and notify you of the missing tax return and payments - please don't assume they didn't notice! With everything being computerized now, it is very unlikely that your missing tax return won't be noticed.
Outside of the IRS rules, you may have other complications from not filing your tax returns. Banks and other lenders typically want to see filed tax returns when you apply for mortgages and some types of loans. To qualify for FAFSA (federal student aid), you must have filed the previous year's tax return. Employers may even require copies of your tax return before making an offer of employment. Thinking of selling your business? You won't be able to if your business taxes aren't currently paid in full. Not filing your Rhode Island state tax returns may affect your ability to renew your driver's license, car registration, and your Rhode Island state issued business license.
If you aren't sure how to proceed with your taxes, please schedule an appointment with Kent County Tax Pros to discuss the best course of action. Bring your paperwork, letters from the State of Rhode Island or IRS, and your concerns and we'll help you understand your options.
Kent County Tax Pros
KentCountyTaxPros@gmail.com
Call/Text 401-889-3668
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