Did you miss the April tax filing deadline? If you haven’t filed your 2017 federal tax return and you will likely owe for last year, it’s important that you file your individual tax return and pay the taxes you owe by June 14th, or you will likely face a higher late-filing penalty.
Taxpayers who owe tax and file their federal income tax return more than 60 days after the deadline will usually face a higher late-filing penalty. Late-filing penalty also known as the failure-to-file penalty is when a tax payer fails to file their returns or forgets to file their extension by the due date. You will only face the late-filing penalty if you have an unpaid tax debt. The penalty is usually 5% for each month or part of the month that the tax return is late.
If you file your federal tax return over 60 days after the April due date or over 60 days after the October extension date, then you will face a penalty. The minimum penalty you will face is either $210 or 100% of the unpaid tax, whichever is less. For example, if the amount that you owe in taxes is more than $210, you will only have to pay $210. Now if you owe less than $210, you will pay the amount that you owe.
This penalty does not apply to the estimated 14 million taxpayers who asked the IRS for a six-month extension of time to file. They must file by October 15th, 2018. If you did not file, or did not request an extension, the IRS recommends filing to avoid a penalty increase. The late-filing penalty will stop accruing once the taxpayer files.
Once you have completed filing your individual return, it’s important that you pay whatever taxes you owe to avoid additional late-payment penalty and interest charges. The late-payment penalty, also known as the failure- to-pay penalty is usually ½ if 1 percent of the unpaid tax for each month or part of the month the payment is late. Interest, currently at the rate of 5 percent per year, compounded daily, also applies to any payment made after the original tax deadline.
Once your federal tax return is filed; the IRS will figure the penalty and interest due and bill you. Normally, you will then have 21 days to pay any amount due. You can use your online account to view any taxes you might owe and you can also make payments online.
If you need helping to figure out how much taxes you owe, or filing your tax return, Polston Tax can help. We are able to prepare and file all current and back tax returns for individuals and small businesses. Call us today at 844-841-9857 or click below to schedule a free consultation.