Today, Optima Tax Relief’s Chief Tax Officer and Lead Tax Attorney, Phil, answers a common Reddit question: “Can I skip paying my taxes this year?” Technically, paying your taxes is a completely voluntary act. However, skipping your taxes is never a good idea.
Penalty and Interest Risks
The IRS can assess penalties for both failing to file your tax return and failing to pay taxes owed by the deadline. Filing your return is crucial because the failure-to-file penalty is the most expensive penalty that can accrue monthly and also the easiest to avoid.
Installment Agreements Can Help
If you can’t pay your full balance at once, an installment agreement allows you to make monthly payments. This can reduce your failure-to-pay penalty by up to 50%, helping you manage your debt while staying compliant.
Watch Out for Compounding Interest
Interest on unpaid taxes compounds daily, meaning your balance can quickly grow if left unresolved. Paying even part of your tax debt or setting up a payment plan helps limit this snowball effect.
Take Action to Protect Your Money
While you may not have to pay your taxes immediately, taking proactive steps, like filing on time and arranging a payment plan, can minimize penalties, reduce interest, and keep more of your hard-earned money in your pocket.
If you need tax help, contact us today for a Free Consultation