What’s The Irs Penalty If I Miss The October 15 Extension Filing Deadline
The IRS applies late penalties and interest on a case-by-case basis and will send a separate bill if penalties apply.
Because the IRS has the last word on penalties, we can’t calculate the exact amount if your return is late. But the info below will give you an idea of what to expect in a worst-case scenario .
There are two types of fees that may apply, plus interest on any unpaid taxes:
- Late filing penalties apply if you owe taxes and didn’t file your return or extension by May 17, 2021, or if you filed an extension but failed to file your return by October 15, 2021.
- The late filing penalty is 5% of the additional taxes owed amount for every month your return is late, up to a maximum of 25%.
- If you file more than 60 days after the due date, the minimum penalty is $435 or 100% of your unpaid tax, whichever is less.
You won’t face a penalty if:
You Can Easily Extend Your Tax Return Due Date From May 17 To October 15 By Requesting A Tax Extensionbut Should You
Your federal income tax return is due today . However, if the deadline doesn’t suit you for whatever reason, it’s pretty easy to get the due date extended to October 15. All you have to do is request a tax extension by filing a simple IRS form or paying your taxes electronically . Make sure you act before midnight tonight, though.
Since the process is relatively simple and straightforward, the question then becomes “should you get a tax extension?” Well, it depends. There are advantages and disadvantages to pushing back your tax filing deadline with a tax extension. So, it really comes down to your own situation. What makes sense for you? To help you answer that question, here are a few pros and cons of waiting to file your tax return.
Get An Extension When You Make A Payment
You can also get an extension by paying all or part of your estimated income tax due and indicate that the payment is for an extension using Direct Pay, the Electronic Federal Tax Payment System , or a . This way you wont have to file a separate extension form and you will receive a confirmation number for your records.
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Pro: You Get More Time To File
If you simply can’t file your return by tonight’s deadline, then by all means get a tax extension. You’re sick, you can’t find your tax records, your computer crashedwhatever the reason, if you can’t file you can’t file. Don’t bang your head against the wall trying to come up with a way to get your return in before the stroke of midnight. Take the extension.
More time can also mean a more accurate tax return. For example, you will have more time to determine which tax breaks apply to you and which ones don’t. Haste makes waste. So, if you’re not sure about how to handle something on your tax return, don’t rush it taking the tax extension will buy you more time to figure it out.
How To Pay Your Tax Liability To The Irs
The easiest way is to file your tax return and pay the corresponding liability with the return. If you paper file your return, include a check made payable to the United States Treasury for the amount owed. If you file electronically, send your payment electronically using IRS Direct Pay. There’s no cost for this payment method if you pay from your bank account.
If you can’t afford to pay the full amount at the time you file your income tax return, you should send as much as you can when you file. However, the IRS does give you payment options if you can’t make the full payment.
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First Time Penalty Abatement
If you meet the eligibility requirements, you may be able to have your first penalty waived.
- If you were not required to file a return before you did not receive a penalty for the previous 3 years, and
- You filed any required returns or filed an extension for all previous years, and
- You paid or set up a payment plan for any tax due. Also, if you have a payment plan, you must be current.
If you do not qualify for the abatement, you will get lower penalties for late payment than for late filing. But dont forget that interest begins to accrue the day after the due date and compounds daily, so it may not be worth it to follow that path.
I’ll Probably Get Audited If I File A Tax Extension
The fear of drawing unwanted attention from the IRS keeps many taxpayers from filing a tax extension, but this is not true. In fact, an extension could lower your risk of being audited. It gives you more time to look over your return and verify that everything is accurate. If you rush through your return so you can submit it by the April 15 deadline and you make a mistake, like transposing numbers or failing to report some income, that could bring the IRS to your door.
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What Can You Do With An Ak 1
The purpose of the Schedule K1 is to report each partners share of the partnerships earnings, losses, deductions, and credits. It serves a similar purpose for tax reporting as one of the various Forms 1099, which report dividend or interest from securities or income from the sale of securities.
Are K 1 distributions considered income?
Just like any other income or tax document you get during tax season, you need to report your schedule K1 when you file your taxes for two reasons: Its taxable income. Its already been reported to the IRS by the entity that paid you, so the IRS will know if you omit it when you file taxes.
Will I Get Fined If I File My Taxes Twice
Individuals who unintentionally file two tax returns won’t get fined. Usually, the first one the IRS receives will get accepted and the second will be rejected. H& R Block says that the consequence is your tax return or refund might get delayed as the IRS investigates your duplicate returns.
The IRS uses your Social Security Number as a means of verifying your identity and the authenticity of your tax return. Zacks.com states that if the same SSN is used twice in the same filing year, the IRS must take several steps to prevent identity theft and potential tax fraud.
Someone who attempts to file taxes twice will receive an error code from the IRS and the duplicate return will be rejected.
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Preserve Your Tax Refund
Some people end up filing several years late, and there’s a three-year deadline for receiving a refund check from the IRS if it turns out that you’re due one. This three-year statute of limitations begins on the original filing deadline for that year .
The refund statute of limitations is also extended by six months when you file for an extension, which can preserve the ability of taxpayers to receive their federal tax refunds, even if they’re behind with submitting their tax returns.
What Happens If You Don’t Owe Taxes Or Get A Tax Refund
Most Americans get a tax refund after filing their federal and state taxes. This occurs when you have paid more in taxes over the course of the year than you owe. Most employers withhold money from each paycheck, which go toward your taxes – but those withholdings typically don’t account for the rebates and credits that you may be eligible for, resulting in the government needing to pay you back in the form of a tax refund.
If you fall into this category, owing no taxes to the government or being owed a tax refund, then there is no penalty that occurs for not filing your taxes. However, you won’t receive your tax refund until you do file your taxes. There will be no penalty for filing late, just get the paperwork in to the IRS so they can process your taxes and issue the refund. Technically, you have three years to file taxes and receive a refund.
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What Happens If I Miss The Tax Deadline
If you received an extension and fail to file your income taxes by midnight on Oct. 15, what happens next depends on your situation. If you are owed a refund, there is no penalty for filing late, though this may be different for your state taxes. But if you owe the IRS, penalties and interest start to accrue on any remaining unpaid tax due. There’s also a $330 failure-to-file penalty under the Taxpayer First Act of 2019.
In most states, taxpayers who are granted a federal extension to file automatically receive an equivalent extension to file their state income tax return.
An important note: If you are owed a refund or you filed for an extension through Oct. 15, you were supposed to pay your taxes by May 17. If you owe money, you would have been required to estimate the amount due and pay it with your Form 4868. If you did that, you should have automatically been granted an extension.
Another caveat: If you’re serving in the military — in a combat zone or a contingency operation in support of the armed forces — you may be granted additional time to file, according to the IRS.
Bottom line? It’s best to e-file or postmark your individual tax return as early as possible. CNET’s roundup of the best tax software for 2021 features an array of packages that can help you take care of business quickly and affordably.
See also
What Happens If You File Taxes Late Here Is The Good News And Bad
Just do it already. Reset your view on taxes if you think not filing a return is the best course of action for you. Why do you ask? If you file your taxes late, what will happen?
Well, I’d love to keep it pithy and say, You don’t want to know, but you might care to learn what happens if you file your taxes late, regardless. Why else would you be here with this question in mind?
I should be more realistic as this is a question many people ask themselvesbut should be afraid to find out.
The reality is, filing taxes late can have serious consequences, and what happens if you file taxes late largely depends on whether or not you owe the IRS moneyor you’re even required to file .
If you owe them money, then what will happen is that the IRS will send you a notice asking for payment and detail the penalties and interest you owe with an explanation of what those fees are.
However, if there’s no money due on your tax return, then it becomes less complicated.
The IRS has various options available to collect what they’re owed, such as levying wages or seizing property, and in some cases, interest rates can be up to 30%. You’ll want to avoid all this by filing your taxes on time .
Back to the question What happens if you file your taxes late? A lot. Let’s dive in and find out.
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Penalties For Failure To File
If you didnt request an extension or didnt file by the extended deadline, you will begin to face penalties. The IRS may levy a late-filing penalty of 5 percent on any unpaid taxes for each month your tax return is late. The maximum penalty is 25 percent of the amount due.
The government will forgive late-filing penalties in certain circumstances, such as natural disasters and military service. However, unless you qualify for one of the exclusions, you’ll be required to pay the penalty. The IRS has the authority to recommend jail time for those who fail to submit their taxes, although such cases are rare.
Start Thinking About The 2021 Tax Year
As you review and submit your 2020 taxes, you should also start thinking about moves to make by the end of the 2021 tax year to reduce your tax burden next year.
Gifting to family or charity is always a good way to decrease income and estate tax liability, White said. Shifting income or bunching deductions in certain years can also help to decrease income tax liability especially in years when your tax bracket may be lower.
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Request An Offer In Compromise
- The IRS incorrectly determined the amount you owe.
- Your assets and income are less than the amount you owe.
- The amount is correct, and you can pay the debt in full, but doing so would cause undue economic hardship.
- You are in an open bankruptcy proceeding.
- You have not filed the required tax returns.
- You have not made the required estimated tax payments.
- You are self-employed, have employees, and you have not submitted the required federal tax deposits.
Can I File My State Taxes Online
Many states have their own online tax platforms, which are usually free to use. TurboTax, H& R Block and other online tax tools can also help you file your state return and can import most of the information from a federal return they’ve already prepared, though they usually charge a fee. Check out CNET’s comparison of tax software and services to see which is best for you.
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How Do I Check The Status Of My Refund
The IRS website features a handy web-based tool that lets you check the status of your refund, and there’s also a mobile app, IRS2Go. You can usually access your refund status about 24 hours after e-filing or four weeks after mailing in a return. To check your status, you’ll need to provide your Social Security number or ITIN, filing status and the exact amount of your refund. If your status is “received,” the IRS has your return and is processing it. “Approved” means your refund is on its way.
Read more: What’s your 2020 tax return status? How to track it and your refund money with the IRS
Victims In Fema Disaster Areas: Mail Your Request For An Extension Of Time To File
Find out where to mail your form.
Need more time to prepare your federal tax return? This page provides information on how to apply for an extension of time to file. Please be aware that:
- An extension of time to file your return does not grant you any extension of time to pay your taxes.
- You should estimate and pay any owed taxes by your regular deadline to help avoid possible penalties.
- You must file your extension request no later than the regular due date of your return.
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So, if you don’t file and owe $10,000, the penalties accrue at the rate of $500 per month, up to $2,500 in total. If you do file your return but don’t pay the taxes you owe, the penalty is only 0.5% of the balance due per month.
The IRS also charges interest on overdue taxes at the rate of the federal short-term interest rate plus 3%. That rate currently stands at 3% and is reviewed every three months.
The interest will start accumulating from the new May 17 filing deadline until you pay the taxes owed.
If you are unable to file the return on time, one solution is to file for an extension using IRS Form 4868. It gives you an extra five months until Oct. 15 to pull the return together. Businesses filing for an extension use Form 7004, though the filing deadline for sole proprietorships, partnerships and other pass-through business entities was March 15. The IRS, however, does expect you to pay your estimated taxes along with the extension.
“A lot of people think that an extension gives you extra time to pay taxes you might owe,” said Greene-Lewis. “It doesn’t.”
In other words, if you don’t pay your estimated taxes due when filing for an extension, you’re still liable for the 0.5% monthly penalty, as well as the current 3% monthly interest charged on the balance due.
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The above article is intended to provide generalized financial information designed to educate a broad segment of the public it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.
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