IRS Late Payment Penalty
If you missed the deadline for filing your taxes, you’re not alone. Many taxpayers miss the deadlines for a variety of reasons. There are those who have been hampered by natural disasters such as hurricane, tornado or earthquake aftermath. The IRS has taken into account some special circumstances and made provisions. The April 15 deadline is the date by which filing must occur, unless tax payers file for an extension. If this has been done and the time has expired, filing can still take place. Filers may or may not end up paying a penalty, depending on their situation.
Failure to file penalty
This penalty applies to taxpayers who neglected to file by the April 15 deadline, or if an extension was granted, what ever date was agreed upon. It can amount to more than a failure to pay penalty for taxpayers who owe taxes. The IRS is willing to work with taxpayers who owe taxes and cannot pay them all at once. If securing a loan is not an option to pay the total amount of the tax bill due, the IRS will set up a payment schedule. Just file on time and pay as much as possible at the time of filing.
How much is the failure to file penalty?
The failure to file penalty is normally one half of a percent of the amount of taxes owed in any given month.
Failure to pay penalty
This penalty is usually 5% of unpaid taxes fore every month that the return is delayed. Accrual begins on day 1 after the deadline. The cap, or limit on the penalty is not to exceed 25% of unpaid taxes.
60 days past the deadline
If you file or pay later than 60 days past the deadline, the minimum penalty can be 100% of the taxes due or $135, whichever amount is smaller. If you have paid at least 90% of the taxes owed, you may be exempted from the failure to pay penalty. Making timely payments as scheduled by the IRS is important to avoid further penalties.
Just cause for late filing
If you can show a good reason for missing the deadline, the IRS may have a solution to help. Any taxpayers impacted by severe weather may qualify for a relief of penalties if the IRS deems the reason is legitimate. This also includes any type of catastrophe that was not of your making.
Why it is important to stay in contact with the IRS
Any time a taxpayer is under some type of undue stress, or unavoidable financial crisis, the IRS has certain provisions that may be helpful. It is best for taxpayers to consult directly with IRS representatives to request information about any existing relief programs. If there are no available programs that will help your situation, file on time and pay as much as you can towards your tax bill. Set up a payment plan with the IRS to resolve the issue. It is by failing to file and remaining silent that taxpayers end up paying more in fines and penalties than they otherwise might have.