Filing taxes late can feel stressful, even if you ask for an extension.
The deadline to request a tax filing extension was Tax Day April 15.
The extension gives you until Oct. 15 of this year to submityour formshow you normally would.
Hopefully, you knew that an extension doesnt apply to any payments you owe the government.
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Tax Extension Deadline
Each year, you have until Tax Day to request a tax extension.
Thats typically April 15, like it is this year.
An extension gives you until Oct. 15 to file your taxes.
This exempts you from a late-file penalty.
However, payments to the IRS were still due by April 15.
This is where things can get a little tricky.
Ideally, you know roughly how much you owe to the government, even without filing on time.
You submit your payment to the IRS (but not your tax forms) by April 15 each year.
Ideally, you would pay 90% of what you owe, and thereby avoid a late-payment penalty.
Its good to err on the side of caution here.
Failure-to-File Penalty
Speaking of penalties, there are several to be aware of.
The first of these is the failure-to-file penalty.
This penalty was triggered on April 16 if you didnt file and dont have an extension.
However, the total penalty will not exceed 25% of your unpaid taxes.
For example, penalties are calculated differently for S corporations than they are for individuals.
Whichever number is smaller.
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Failure-to-Pay Penalty
On top of the failure-to-file penalty, the IRS can implement a failure-to-pay penalty.
This penalty is one-half of 1% of your unpaid taxes.
This fee accrues each month until youve made your payment.
Remember owed tax payments are due by Tax Day each year, even if you have an extension.
Failure-to-Pay and Failure-to-File
For some reason (perhaps good will?
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5. reach out to the agency for assistance.
After the three year mark, you forfeit the money to the IRS.
Interest begins accruing the day after tax day and continues until your balance has been paid in full.
Federal filing is always free, but these partnered programs may charge for state tax filing.
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How to Avoid Being Late in the Future
Filing taxes late without an extension can rack up several penalties.
Here are a few more tips to help you file your taxes on time in the future.
If youre employed, find out which tax forms youll need to fill out or receive by April.
Form 1040 is the standard individual income tax return form most people are required to file each year.
When you know what to expect, it makes filing on time much easier.
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