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What are the penalties for filing and paying my taxes late?

Tax_questionQ) What are the penalties for filing and paying my taxes late? A) According to the IRS, Interest is compounded daily and charged on any unpaid tax from the due date of the return (without regard to any extension of time to file) until the date of payment.

  • The interest rate is the federal short-term rate plus 3 percent. That rate is determined every three months.
  • For current interest rates, go to News Release and Fact Sheet Archive and find the most recent Internal Revenue release entitled Quarterly Interest Rates or alternatively, search “quarterly interest rates” on our website, www.irs.gov.

In addition, if you didn’t pay your tax on time, you’ll generally have to pay a late payment penalty.

  • The late payment penalty is one-half of one percent of the tax (0.5%) owed for each month, or part of a month, that the tax remains unpaid after the due date, not exceeding 25 percent.
  • You will not have to pay the penalty if you can show reasonable cause for the failure.
  • The one-half of one percent rate increases to one percent if the tax remains unpaid after several bills have been sent to you and the IRS issues a notice of intent to levy.
  • Currently, if you filed a timely return and are paying your tax via an installment agreement, the penalty is one-quarter of one percent for each month, or part of a month, that the installment agreement is in effect.

If you did not file on time and owe tax, you may owe an additional penalty for failure to file unless you can show reasonable cause.

  • The combined penalty is 5 percent (4.5% late filing, 0.5% late payment) for each month, or part of a month, that your return was late, up to 25%.
  • The late filing penalty applies to the net amount due, which is the tax shown on your return and any additional tax found to be due, as reduced by any credits for withholding and estimated tax payments.
  • After five months, if you still have not paid, the 0.5% failure-to-pay penalty continues to run, up to 25%, until the tax is paid.
  • The total penalty for failure to file and pay can be 47.5% (22.5% late filing, 25% late payment) of the tax owed.
  • If your return was over 60 days late, however, the minimum failure-to-file penalty is the smaller of $135 ($100 for returns required to be filed before January 1, 2009) or 100% of the tax required to be shown on the return.




 

Filed Under: IRS

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153 Responses to Click to Tell Us Your Experience At Your Local Tax Office

  1. Because the IRS processes the first return it receives, if another person claims your dependent first, the IRS will reject your return. The IRS won’t tell you who claimed your dependent. But if you don’t suspect anyone who could have claimed the dependent, your dependent may be a victim of tax identity theft. You’ll need to take some steps to protect your right to claim the dependent and your refund if you don’t think that the other person was eligible to claim your dependent. First, double check that you meet all of the requirements to claim the dependent.

    The IRS may delay your refund while the IRS looks into the issue, but you should still receive your refund. File a paper return. Note that when you file a paper return, it can take six to eight weeks for the IRS to process. This includes things like birth certificates and proof of identity, but also documents that show that your dependent lived with you at the same address for more than half of the year. This doesn’t mean that you can’t correct the situation. Don’t panic. The most important thing to remember is to prove with proper documentation that you are entitled to claim the dependent. Document your case as the IRS rules for claiming a dependent can get complicated.

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Taxoffices.org is a private website not a government website. If you have questions on your taxes it is always best to consult with a certified tax accountant in your state. The Tax Relief Helpline is NOT A State Government or IRS service and is not affiliated with taxoffices.org.