Avoid Late Tax Payment Penalties

There is a difference between failing to file your taxes on time and failing to pay your taxes on time.  The law provides that the IRS can assess a penalty on either or both instances, should they occur.

Failure-to-file occurs if you did not file by the tax deadline.  
  • This penalty is generally 5% of the unpaid taxes for each month or part of month it is late, up to 25% of your unpaid tax.
  • If the return is more than 60 days lates, the minimum penalty is $135 or 100% of the unpaid tax, whichever is smaller.

Failure-to-pay occurs if you did not pay by the due date.  Filing a Tax Extension only extends the amount of time to file, NOT to pay any tax due.
  • Generally there is a penalty of  ½ to 1% of your unpaid taxes for each month or part of month after the due date that your taxes are not paid, up to 25% of unpaid taxes.
  • If you filed a Tax Extension and paid at lead 90% of your tax due by the original due date and pay the remaining balance by the extended due date, you will not incur a failure-to-pay penalty.

If both penalties apply in any month, the 5% failure-to-file penalty is reduced by the failure-to-pay penalty; unless your return is more than 60 days late.  The minimum penalty will be $135 or 100% of the unpaid tax, whichever is smaller. If you can show reasonable cause for filing or paying late, the penalties may be waived.

If you failed to file your return and/or Form 4868 for an extension, you will want get your return filed and pay any taxes due as soon as possible to avoid further penalties as stated above.

ExpressExtension is an authorized IRS E-File provider and while we do not give tax advice, we do want to make our customers aware of of situations that may affect you during tax season.  Please contact a tax professional for tax advice and questions pertaining to tax laws.

If you have any questions about filing Tax Extensions, you can contact the Express Tax Support Center in Rock Hill, SC at 803-514-5155 between the hours of 8am – 6pm EST, Monday through Friday or by email at [email protected].

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