April 15th was the tax day deadline for most income tax payers. If you are due a refund, there is no penalty associated with filing a late income tax return. But if you have a balance due and you failed to file and pay by April 15th, you will usually owe interest and penalties on the income tax you pay late. You should file your income tax return and pay the tax as soon as you possibly can to stop the accrual of the interest and penalties.
If you file your federal tax return late and owe additional income tax with the return, two penalties may apply. The first is a failure to file penalty for late filing. The second would be a failure to pay penalty for paying the tax late.
The failure to file penalty is normally 5% of the unpaid taxes for each month or part of the month that a tax return is late. It will not exceed 25% of your unpaid taxes.
If you file your return more than 60 days after the date it was due, the minimum penalty for late filing is the smaller of $135 or 100% of the unpaid income tax.
The failure to pay penalty is generally .5% per month of your unpaid income tax. It applies each month or part of month your taxes remain unpaid and begins accruing the day after the taxes are due.
If the failure to file penalty and the failure to pay penalty both apply in any month, the maximum amount charged for those two penalties that month cannot exceed 5%.
You should file your tax return on time, even if you cannot pay. The failure to file penalty is 10 times the amount of the failure to pay penalty.
You will not have to pay a penalty if you can show reasonable cause for not filing or paying on time.
If you have questions, feel free to contact us at Dusseau & Makris, PC, your Scottsdale CPA firm.