One of the most dreaded days of the calendar year for many Americans is here! That’s right, the deadline for Filing your income tax return is tomorrow April 17th, 2018. If you are not ready to file your federal tax return here is a quick guide to the potential tax penalties you might face. You may be asking yourself, what is the penalty for filing a tax return late?
What is The Penalty For Filing a Tax Return Late?
If you owe taxes and do not file a tax return or file for an extension by tomorrow's deadline you will incur various penalties and interest. However, penalties generally don’t apply when you are expecting a tax refund and fail to file a tax return.The penalties for failing to file a tax return or tax extension are much higher than failing to pay taxes owed.
Penalties For Late Tax Payment
At the mention of IRS penalties, you might choose the bury-your-head-in-the-sand option this tax season. However, the penalties and interest for not filing a return or Tax Extension are notably worse than failing to pay taxes owed.
If you fail to pay at least 90 percent of the full amount owed on time, you will be charged a late payment penalty of .5 percent for each month the tax remains unpaid. This will continue until the tax amount is paid in full or the penalty reaches the maximum 25% penalty.
The .5 percent rate will increase to one percent ten days after the IRS issues the notice of intent to levy.
If you fail to pay at least 90 percent of the full amount owed on time, you will be charged a late payment penalty of .5 percent for each month the tax remains unpaid. This will continue until the tax amount is paid in full or the penalty reaches the maximum 25% penalty.
The .5 percent rate will increase to one percent ten days after the IRS issues the notice of intent to levy.