Okay so we all know that April 18th was last week… but what happens if you missed your tax deadline?
If you failed to file or pay on time, please do so as soon as possible to keep the penalties as low as possible. To help you out, here are some tips about filing and paying the IRS late:
ONE: 2 Penalties may apply
Penalty one: filing late
If you file 60 days after April 18th, the minimum penalty is $205 or if you owe less than that, 100 percent of the unpaid tax. Other than that, the penalty can be as much as 5% of your unpaid taxes each month, reaching a maximum at 25%
Penalty two: paying late
This penalty is generally half of 1% of your unpaid taxes per month. It can go up to as much as 25% of unpaid taxes.
TWO: Combined Penalty for both
If late filing and late payment penalties are applied, the maximum amount charged for these penalties is 5% per month.
THREE: You should file even if you cannot pay
Filing as soon as possibly will keep the interest and penalties to a minimum. If you cannot pay in full, getting a loan or paying by debit or credit card may be less expensive than owing the IRS.
FOUR: Payment options
You can pay directly through the IRS. The IRS will also work with you to resolve your tax debt, for example by setting up a payment plan.
FIVE: When the late payment penalty does not apply
If you requested an extension of time to file your tax return by April 18th and also paid at least 90% of the taxes owed, you may not receive a failure to pay penalty. But you must pay the remaining balance by the extended due date. You still will owe interest on any taxes paid after April 18th.
SIX: When there is no penalty due to reasonable cause
You will not have to pay the penalties if you can show a reasonable cause for not filing or paying on time.