Who Needs to File

• Not everyone is required to file a tax return. You'll find a questionnaire on the IRS website to determine if you need to file. The questions cover a range of topics from whether you were entitled to certain tax credits to whether you received a distribution from your retirement plan or sold your home. If you answer yes to any of these questions, you should file a tax return even if your income does not meet the minimum threshold for filing because, otherwise, you won't receive any refunds or credits you qualify for.
  
  

Late Return

• If you missed the deadline to file your taxes, you may file your taxes late. However, interest and penalties will be assessed on any amounts you owe. Interest accumulates from the due date until you pay the tax. Interest is determined quarterly. If you owe tax and you did not file on time, your total late filing penalty is typically 5 percent of the tax you owe for each month that your return is late, up to 5 months. The minimum penalty due for late filing is the lesser of $135 or 100 percent of the taxes you owe. If you are owed a refund from the IRS, you must file your return within three years in order to claim it.
  
  

Not Filing

• If you never file your tax return, the IRS will charge you penalties and interest on the amount of taxes you owe. The IRS will then prepare a return for you based on the information it has received from your employer, banks or other payors. When the IRS prepares your return, it does not give you any extra exemptions and, accordingly, the amount will likely be higher than the actual taxes you owe. Once the IRS has determined the taxes are owed, it will initiate collections. Collection efforts may take the form of garnishment or even liens against your property. If you do not file your taxes for an extended period of time, the IRS may initiate a criminal tax investigation against you, which could ultimately result in prosecution that could lead to jail time.
  
  

Payment Options

• If you are avoiding filing your taxes because you can't afford what you owe, you should be aware that the IRS is willing to work with you and has several ways for you to make payments. If you file your return, you can set up an installment agreement with the IRS that allows you to pay your taxes over time. In certain cases, the IRS may enter into a compromise agreement that results in a reduced amount owed.