April 15, the personal tax deadline is long gone and still there are many who have done their duty. If you owe a refund and you did not file it on time, you are safe. But, if you owe tax to the IRS and did not file it on time, you are sure to invite late filing and late payment penalties on to yourself.
Late Filing Penalty:
When you do not file your tax on time, you will have to pay 5 percent of the unpaid taxes for each month or part of a month that that you delay in filing as penalty. Late filing penalty normally won’t exceed 25 percent of your unpaid taxes.
Minimum Late Filing Penalty:
This is a type of penalty that is imposed when you file your return more than 60 days after the due date or extended due date. This minimum penalty is actually a smaller amount of $135 or 100 percent of the unpaid tax.
Late Payment Penalty:
You might have filed your tax but did not pay it due to any reason; you will have to pay a late payment penalty. This is generally 0.5 percent per month of your unpaid taxes. This amount will be calculated for every month or part of a month your taxes remains unpaid and starts growing the day after taxes are due. Remember that you can build up penalty as high as25 percent of your unpaid taxes.
Combined Penalty per Month:
If you fail to file your tax and fail to pay the owed amount of tax in a particular month, you will face Combined Penalty per Month. Themaximum amount charged for those two penalties that month is 5 percent.
Can’t Pay Penalty:
Experts ask taxpayers to file their tax on time even if they can’t pay their tax amount as a single payment. There are several options to help them pay off their tax amount. Talk to an IRS representative and explain them your financial situation, they will help you with other options like paying with credit card, installment options or by advising on extended due dates.
Go Without Penalty:
Failure-to-file or failure-to-pay penalty gets annulled if you can show some strong reasons to your financial issue. You may also apply for a penalty relief for repayment of excess advance payments of the premium tax credit for 2014.
TaxGarden not only helps you pay your tax on time but also is a medium way easier than ever. Now you don’t have to postpone your tax filing and suffer paying penalties for not filing. Follow our expert advices to organize your finances and budget to help yourself prepared to pay tax if you know any or get ready to reap more refund than last year.