So, Tax Day came and went, and you still haven’t filed, huh? Well brace yourself because you may have some expensive repercussions heading your way. If you owe the IRS and missed the tax deadline, you’ll be penalized for failing to file and for not paying on time. Plus, your debt will accumulate interest. Here’s how much you can expect to dish out.
Late filing penalty
Some people think that if they can’t afford to pay right now, they might as well just hold off filing altogether. That’s a terrible decision. The penalty for failing to file is at least 10 times more expensive than the penalty for failing to pay. You’ll be charged 5% of your unpaid taxes for every month your return is late. The penalty can reach a maximum of 25%. Once your return is more than 60 days late, the minimum penalty jumps to $435 or 100% of your unpaid taxes, whichever amount is lower. If you still need to file, ezTaxReturn can help. It’s the fastest and easiest way to prepare your return.
Late payment penalty
The penalty for failing to pay doesn’t start as high. It starts at 0.5% of your unpaid taxes and can reach a maximum of 25%. If the IRS approves you for an installment agreement, the penalty is 0.25%. You’ll be penalized for every month or portion of the month that your payment is late. The only way to stop accruing penalties and interest is to pay your total balance.
You’ll accumulate interest, too
Aside from the penalties, you’ll also need to pay interest on your tax debt. The interest rate is the federal short-term rate plus 3%. Interest accumulates daily and starts as soon as you miss the tax deadline.