Mar 16, 2010 Tax StrategiesTweet
The IRS wants you to know about penalties if you don’t file your 2009 tax return by April 15, 2010. The government website’s newsroom offers the following advice:
There are two different penalties you potentially face: a failure to file and a failure to pay penalty. The failure to file penalty is applied when you do not file by April 15 (and have not applied for an extension). You face a failure to pay penalty if you do not pay the taxes you owe by the tax filing deadline. Since the failure to file fines are usually larger than the failure to pay penalty, it is always best to file a tax return and negotiate a payment option plan rather than failing to file on time. Late filing penalties are usually 5 percent of unpaid taxes for every month or part of the month (up to 25 percent of your entire tax liability) that the return is delayed in filing. If you file a return more than 60 days after the due (or extended due) date, you will be fined the smaller of $135 or 100 percent of the taxes you owe.
You will have to pay a failure to pay penalty of 1/2 of 1 percent of the amount of taxes you owe (up to 25 percent) for each month beyond the date the taxes are due. If you file an extension and pay at least 90 percent of your tax liability by the filing deadline, you can avoid a failure to pay penalty by completing the filing and payments by the extended due date. You will not have to pay a failure to file or a failure to pay penalty if you can prove that your delayed filing or payment was not willful neglect but had reasonable cause. More information about avoiding penalties is available at the IRS government website, www.irs.gov.
Tags: Tax Penalties