The tax filing deadline is approaching. If you don’t file your return and pay
your tax by the due date you may have to pay a penalty. Here are nine things the
IRS wants you to know about the two different penalties you may face if you do
not pay or file on time.
If you do not file by the deadline, you might face a failure-to-file
penalty.
If you do not pay by the due date, you could face a failure-to-pay
penalty.
The failure-to-file penalty is generally more than the failure-to-pay
penalty. So if you cannot pay all the taxes you owe, you should still file your
tax return and explore other payment options in the meantime.
The penalty for filing late is usually 5 percent of the unpaid taxes for
each month or part of a month that a return is late. This penalty will not
exceed 25 percent of your unpaid taxes.
If you file your return more than 60 days after the due date or extended due
date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid
tax.
You will have to pay a failure-to-pay penalty of ½ of 1 percent of your
unpaid taxes for each month or part of a month after the due date that the taxes
are not paid. This penalty can be as much as 25 percent of your unpaid
taxes.
If you filed an extension and you paid at least 90 percent of your actual
tax liability by the due date, you will not be faced with a failure-to-pay
penalty if the remaining balance is paid by the extended due date.
If both the failure-to-file penalty and the failure-to-pay penalty apply in
any month, the 5 percent failure-to-file penalty is reduced by the
failure-to-pay penalty. However, if you file your return more than 60 days after
the due date or extended due date, the minimum penalty is the smaller of $135 or
100% of the unpaid tax.
You will not have to pay a failure-to-file or failure-to-pay penalty if you
can show that you failed to file or pay on time because of reasonable cause and
not because of willful neglect.
