April 15th has come and gone and you never filed your income tax return. The IRS does not always tack on a penalty, but if they do, how much could that late filing really cost you?
There are two forms of penalties for late taxes the IRS can impose on a personal or business taxpayer. The first is associated with paying the IRS the monies owed for the previous tax year(s). This IRS tax fee is added onto the monies owed as a percentage of the total bill. The second fee is associated with filing personal or business income tax later than April 15th of the tax year without filing for an income tax extension.
Late Filing, Fees and Penalties
The IRS expects every tax payer to either file their income tax paperwork either electronically or by mail on or before the 15th of April. On the night of the 15th, the United States Postal Service remains open until midnight in order to ensure the taxpayer has every chance to file their income tax return on time. If the taxpayer simply does not file the return, the IRS has the ability to begin the penalization process. The penalties associated with filing a late income tax return are calculated based on total amount of taxes owed. There is no information listed on the IRS website about penalties for filing taxes late when a refund is owed to the taxpayer.
From the 16th of April forward, the amount of the IRS penalty will be compounded at 5% of the total tax bill for each month the tax paperwork is delinquent. If the income tax paperwork is not filed within 60 days of the due date, the penalty will revert to either $100 or 100% of the total income tax owed depending on which amount is smaller.
Are There Exceptions to the Late Penalty Rule?
The IRS allows the taxpayer to petition for a reversal of the penalties imposed on their tax account. The allowable exceptions include working abroad and being an active member of the armed forces. The IRS is willing to hear the reason for the late filing from the taxpayer and will review the case based on the reason for late filing which needs to be sent along with a copy of the tax bill to the IRS center in their region.
Filing For an Extention After April 15th
While the IRS may reject the filing, the taxpayer can always try to file for an extension if they remember to file within a few days after the 15th of April. All federal income tax forms can be found online via the IRS website. If an extension cannot be filed, the fastest way to report your income to the IRS is through the e-filing of your income tax forms.