The Internal Revenue Service urges taxpayers who are yet to file the tax return to avoid the penalty increase by filing their return by Thursday (June 14th .2018) when the 60 days period from the due date of filing of tax return ends. Readers should know that if you owe taxes and file your tax return more than 60 days after the deadline will face a higher late-filing penalty. However, in following two cases you should not be bothered about late-filing penalty :
- the more than 135 million taxpayers who met this year’s April 18 deadline to file their individual tax return.
- It also won’t apply to the estimated 14 million taxpayers who asked the IRS for a six-month extension of time to file, as long as they file by Oct. 15, 2018.
. The late-filing penalty will stop accruing once the taxpayer files his/her /its return
How to compute late filing penalty?
You can use the calculator for computing penalty for failure to file and pay tax . The late-filing penalty is imposed when a taxpayer fails to file a tax return or request an extension by the due date. Please note that the failure to file tax return will not be assessed if there is no unpaid tax. The rate of penalty is usually 5 per cent for each month or part of a month that a tax return is late.
When Does Failure to File Penalty Increases?
If you file tax return after 60 days from the due date ( 18th April for Tax Year 2017 or 60 days after the October due date if filed an extension), the rate of penalty is a minimum penalty is either $210 or 100 percent of the unpaid tax, whichever is less. The late-payment penalty, also known as the failure-to-pay penalty, is usually ½ of 1 percent of the unpaid tax for each month or part of a month the payment is late. Interest, currently at the rate of 5 percent per year, compounded daily, also applies to any payment made after the original April 18 deadline.
After a return is filed, the IRS will figure the penalty and interest due and bill the taxpayer. Normally, the taxpayer will then have 21 days to pay any amount due. Taxpayers can use their online account to view their amount owed, make payments and apply for an online payment agreement. Before accessing their online account, taxpayers must authenticate their identity through the Secure Access process.
Can you Get Relief from Failure to File Penalty?
IRS does allow relief to certain taxpayers depending upon the facts and circumstances. Those who have a history of filing and paying on time often qualify to have the late filing and payment penalties abated. If you are not assessed penalties for the past three years and meet other requirements, you can hope for the relief from the penalty for failure to file tax return. Please read How to Get first time penalty abatement from IRS?