The IRS imposes penalties are for filing and/or paying late.

The penalty for late filing of your federal return generally is 5% of the amount due for each month or part of a month the return is late. The penalty generally does not exceed more than 25% of the tax due. If the return is at least 60 days late, the minimum penalty is $330 (for returns required to be filed after December 31, 2019, and which is adjusted annually for inflation), or the amount of the tax due, whichever is smaller. Thus, it is important to file by the April deadline or request a filing extension so that the return can be filed within the extension period. Similar late filing penalties generally also apply to your state return.

The penalty for late payment of the tax is generally 1/2 of 1% of the unpaid amount for each month or part of a month the tax is not paid. The penalty generally can?t exceed 25% of the unpaid amount. Thus, it generally is important to file on time even if you can’t pay a balance due at the time the return is filed. Similar late payment penalties apply to your state return.

In addition to the above penalties, the IRS charges interest on the balance due, which begins to accrue on the balance due beginning from the original April due date of the return. Similar rules apply to your state return.

If you are unable to pay the balance due in full, you should pay as much as possible with your returns to minimize the amount subject to penalties and interest. In the event that you receive any correspondence relating to your returns, please contact us immediately so that we may provide assistance and advice.

Categories: Tax Articles, Tax Debt Resolution, Tax Penalties