2023-01-26 00:07:19

Here's What Happens If You Don't Pay Your Taxes

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Nasdaq
By The Motley Fool

Image source: Getty Images

Many Americans are used to getting a tax refund every year. And in 2022, the average tax refund issued came to $3,121.

But not everyone who files a tax return gets a refund. You may end up owing the IRS money for different reasons, such as being self-employed and not having paid enough estimated taxes, or having made a lot of money in a taxable brokerage account.

Discover: Find the best tax software for your situation here

Save: We researched free tax software and put together a list of the best here

Now if you're able to pay your IRS bill on the spot, great. Doing so will help you avoid interest and penalties on the sum you owe.

But many people don't have money just sitting around in a savings account they can use to pay the IRS when a surprise bill arrives. And if that's the boat you're in, you may be inclined to ignore the problem of owing money on your taxes and hope it goes away. That, however, is a move that's highly unlikely to work out well for you.

Don't ignore a tax bill

When you don't pay your taxes, you accrue interest and penalties on the sum you owe. But that's not all.

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