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Tax Laws

5 Facts on Late Tax Filing and Late Payment Penalties

5 Facts on Late Tax Filing and Late Payment Penalties

By on Jul 15, 2013 in Tax Laws | 0 comments

Most people met the April 15 deadline for filing their income tax return and paying taxes that they owed. However, you may be one of the individuals unable to meet this commitment. You may not have been able to find your records and time has just slipped away, or perhaps you no longer have a partner who did the paperwork for the family. In these and other scenarios you may fear dealing with the IRS on your own, especially if you think you may owe some money. The law The action the IRS may take as part of their legal obligation includes issuing penalties you may have to pay for failing to file as well as for not meeting tax payment due dates. Five facts There are several main things to remember as part of these penalties that can assist you with decisions on moving forward. Reducing the overall cost It is better for you to file on time without including your tax payment than not filing at all. The fee for not filing is usually more than the one for failing to pay.  Also, extra interest and penalties can be reduced through payment of as much as you can with the return. Perhaps a loan will help you out or looking at a payment installment agreement. How the penalty is calculated for filing late An amount of 5 per cent of the unpaid taxes is normally the penalty for each month or part thereof for late tax returns. This amount begins accruing one day after the due date for tax filing and will not go higher than 25 per cent of taxes you have not paid. How the penalty is calculated for paying taxes late You usually receive a failure-to-pay penalty of half of 1 percent of your unpaid taxes if you do not meet the deadline for your tax payments. This amount begins accruing one day after the due date for tax filing and applies to the number of days. Benefits of an extension of time done in time If you request an extension of time within the offered period and you pay at least 90 percent of the taxes you owe with it, you may avoid...

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