{"id":28902,"date":"2024-03-21T09:39:53","date_gmt":"2024-03-21T14:39:53","guid":{"rendered":"https:\/\/blog.eztaxreturn.com\/?p=28902"},"modified":"2024-04-13T14:08:33","modified_gmt":"2024-04-13T19:08:33","slug":"what-are-the-penalties-and-interest-for-filing-taxes-late","status":"publish","type":"post","link":"https:\/\/staging.eztaxreturn.com\/blog\/what-are-the-penalties-and-interest-for-filing-taxes-late\/","title":{"rendered":"What Are the Penalties and Interest for Filing Taxes Late?"},"content":{"rendered":"\n

The information in this article is up to date for tax year 2023 (returns filed in 2024).<\/em><\/p>\n\n\n\n

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The April 15th tax deadline<\/a> is fast approaching. If you haven\u2019t filed your taxes yet, there is still time. But what happens if you file taxes late?\u00a0\u00a0<\/p>\n\n\n\n

If you’re under 65 and earned less than $13,850 (for single filers) or $27,700 (for married couples filing jointly) in 2023, you aren\u2019t required to file a tax return<\/a> and won\u2019t be penalized. However, if you don\u2019t file, you may miss your chance to receive a tax refund. <\/p>\n\n\n\n

On the flip side, taxpayers who owe the IRS and miss the filing deadline will face two penalties. One for failing to file on time and another for not paying your owed taxes by the deadline. You\u2019ll also accumulate interest until your balance is paid in full.\u00a0<\/p>\n\n\n\n

Here\u2019s what you need to know about what you may owe and how to avoid or reduce the penalties for late taxes. <\/p>\n\n\n\n

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Failure-to-pay penalty<\/strong><\/h2>\n\n\n\n

Most Americans can\u2019t afford to cover a surprise expense with their savings. So, if you receive an unexpected tax bill and are unable to pay your full balance by the deadline, you\u2019re not alone. But if you don\u2019t file for an extension ahead of time, you\u2019ll be charged a failure-to-pay penalty<\/a>.  <\/p>\n\n\n\n

The penalty is 0.5% of your unpaid taxes for each month the payment is late, up to a maximum of 25%.<\/strong>  <\/p>\n\n\n\n

The IRS will notify you if you owe any penalties on top of your tax bill. If you can\u2019t pay your taxes<\/a>, the IRS does offer a payment plan<\/a> so you can pay off your balance over time.<\/p>\n\n\n\n

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Failure-to-file penalty<\/strong><\/h2>\n\n\n\n

Sometimes when people know they\u2019re going to owe money, they put off filing until they can come up with the extra cash. This is a costly mistake. The failure-to-file penalty<\/a> is much higher than the penalty for not paying on time.  <\/p>\n\n\n\n

The penalty is 5% of your unpaid taxes each month it\u2019s late, up to a maximum of 25%<\/strong>.  <\/p>\n\n\n\n

Once your return is more than 60 days late, your minimum penalty becomes $485 or 100% of your owed taxes, whichever is less. Even if you can\u2019t afford to pay your balance, always file on time, and pay as much as you can. <\/p>\n\n\n\n

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Interest<\/strong><\/h2>\n\n\n\n

Your unpaid tax debt starts accumulating interest<\/a> the minute you miss the tax deadline, and it builds daily. It only stops once your balance is paid in full. The interest rate is the federal short-term rate plus 3 percent. <\/p>\n\n\n\n

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Get Started Now<\/a><\/div>\n<\/div>\n\n\n\n
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Four ways to avoid late penalties<\/strong><\/h2>\n\n\n\n
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1. File for a tax extension<\/strong><\/h3>\n\n\n\n

If you need more time to prepare your return, you can apply for an extension to file<\/a>. A tax extension will save you from paying any failure to file penalties. You must apply for the extension by April 15th (the normal filing deadline). <\/p>\n\n\n\n

Keep in mind, a filing extension does not extend your time to pay the actual taxes owed. You are still required to pay by the April 15th tax deadline. If you need more time to pay, you can apply for a payment plan separately.\u00a0<\/p>\n\n\n\n

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2. Apply for a payment plan<\/strong><\/h3>\n\n\n\n

If you can\u2019t pay the full amount of your tax bill on time, pay what you can now and then you can apply for a payment plan<\/a> to pay off your balance over time. Depending on your tax situation, you may qualify for a long-term or short-term payment plan: <\/p>\n\n\n\n