Paying your taxes is the patriotic thing to do, but for most Americans, the process is quite a headache. From making time between multiple jobs to figure your deductions to paying an accountant to do your taxes, there is nothing enjoyable about filing tax returns- but it has to be done. If you're an employee who earns more than $600 annually, you will receive a W2 earnings report from your employer.
The employer will also file a copy with the Internal Revenue Service. The IRS already has your earnings information, why should you give them the same? Stinking bureaucracy, right? Well, here is what happens if you don't file a W2.
The IRS Knows When You Don't File Your W-2
Perhaps you got a job last year, so this year's tax season is your first time dealing with Uncle Sam. You could be forgiven for thinking the IRS won't know you haven't filed your W2 since it has a copy anyway! Sorry to break the news to you: The IRS will know.
Thanks to advanced technology, the agency's computers have the ability to pick out taxpayers who haven't filed their returns. Don't you ever ride on those computers failing to identify you!
When You Owe Federal Taxes
Your employer withholds taxes from your pay and remits to the IRS. So then, how does it occur that some employees owe federal taxes? Good question! Remember you filled out a W4 form when starting your job? Perhaps you inadvertently claimed more allowances, leading to your employer under-withholding your taxes (remitting fewer taxes that you should actually be paying).
Consequently, you'll need to pay up the difference. Now, if you owe the IRS money and don't file your formW-2, the amount you underpaid will face a penalty - if you don't pay up before the due date (usually April 15). If the deadline has gone, you have 3 years to file an amended return.
When The IRS Owes You Money
When your employer over-withholds your taxes, you're due for a refund. Yay! But what happens if you don't file a W2 and you have a refund due? One of two things could happen. The IRS can either pay your refund or write you a missive, saying it's holding your refund till your file your missing W2 form.
Given that there is over $1.1 billion in unclaimed tax refunds, don't bank on the IRS voluntarily writing you a check if your tax records aren't straight!
What If I Don't File My Taxes? Is Jailtime On The Cards?
Going to prison is certainly the greatest fear among many taxpayers who, for whatever reason, don't file returns with the IRS. Let's get this out of the way. Nobody is going to throw you behind bars when you fail to file a form W2. It's often an honest mistake when a person doesn't file the W2. Some never receive the form from the employer or receive it too late, many others simply forget.
Sooner or later, these people realize the mistake, and there is often plenty of time to make amends. However, if you intentionally fail to file your tax returns or file a fraudulent return, there is a good chance you'll get up to 5 years in prison.
What Happens If You Don't File a W-2? You Stand to Lose
Sure, filing tax returns is an unnecessary distraction given our busy lives, but we have no choice. Like death, paying taxes is certain. We have shed light on what happens if you don't file a W2, and evidently, you're the one who stands to lose the most.
Do the right thing, be a patriotic citizen, and let us help you create your form W-2 today!