Meeting the deadline is essential when it pertains to filing income taxes. However, some taxpayers wind up missing the deadline for a variety of reasons. The 15th of October is a Sunday, thus the deadline for filing an extension of taxes falls on that day instead. Due to this, the deadline for filing a tax extension will fall on Monday, October 16. If you also neglect this deadline, you could be subject to one of two penalties.
Tax Extension; Source- CNBC
Penalties for failing to file and failing to pay are extended during these times. No failure to file penalties is necessary for those who requested an extension and submitted their returns on time. If you don’t submit your taxes as quickly as you can following October 16, you risk incurring penalties if you don’t file by the April deadline extension. Further interest and fines will apply if you don’t accomplish this.
Penalties For Missing Deadline Of Tax Extension
The Failure to File penalty is one of the major fines for filing taxes after the deadline. The IRS may apply this fine if you owe taxes and fail to file your tax return by the deadline. Up to an aggregate of 25%, the penalty is calculated as 5% of the outstanding debt per month. The Failure to File penalty is joined by the Failure to Pay penalty. The unpaid taxes are subject to this penalty at an amount of 0.05% per month, again, up to an aggregate of 25%. From the filing deadline for the tax return to the payment date, the IRS assesses interest on unpaid taxes.
The Maximum Amount Of Penalty
The maximum cumulative penalty for submitting and paying late returns is 5% (consisting of 4.5% for late submission and 0.5 percent for late payment), with a cap of 25%. Taking into account installments made through delaying, anticipated payments for taxes, and refundable credits, the tax that is still owed after the deadline is subject to a late filing penalty. Your return will be subject to a Failure to File penalty if it is over 60 days overdue. The lesser amount of $450 (for 2023) or entirely of the tax that must be disclosed on the return is used to determine this penalty.
Ways To Pay Your Tax In Full
The IRS doesn’t intend to you for filing your return late if you anticipate receiving a tax refund with haven’t done so. However, it’s wise to speak with a tax expert before filing if you expect to owe taxes because you can be responsible for fines and interest. There are choices if you are unable to pay your taxes in full. If your total debt, including interest and penalties, is less than $100,000, you may be eligible for a 180-day payment plan. To request this option, there is no fee.
If you owe less than $50,000 including interest and penalties you may use monthly installment agreements as a long-term payment plan. According to your income, you might not have to pay the $31 to $130 setup charge. If you are unable to pay a tax debt right away, the IRS may occasionally put off collecting it. Usually, to do this, a Collection Information Statement must be filled out, and supporting documentation must be presented.
