Tax due date

On Penalties

 

Today's the last day to file your taxes and pay your tax liability.  The IRS have increased the number of electronic filing and payment options for you, reducing your burden and improving the timeliness and accuracy of tax returns. The IRS can assess a penalty if you fail to file, fail to pay or both by the due date.

They are two different penalties you may face if you file or pay late.

• If you do not file by the deadline, you might face a; 
• Failure-to-file penalty- So if you cannot pay all the taxes you owe, you should still file your tax return on time and pay as much as you can. 
• 
  The failure-to-file penalty ($) is generally more than the failure-to-pay penalty.
• The penalty 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.
• If you do not pay by the due date, you could face a failure-to-pay penalty.
• Generally 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. 

• On a Valid Extension: 
• If you request an extension of time to file by the tax deadline and you paid at least 90 percent of your actual tax liability by the original due date, you will not face 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 percent of the unpaid tax.  Interest are added to all penalties due.

• Can you avoid these penalties?
• 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.

 Ask your tax consultant for more details and information.

 

Source: http://www.irs.gov/

 

 

 

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