The IRS is strict when it comes to filing your taxes on time, and if you owe money you will be slapped with a pricey penalty.
The most common penalty is the Failure To File Penalty, which is given for those who do not file by the deadline.
The deadline this year was April 18, 2022.
How to IRS penalties work
There is no penalty for filing late if you’re owed a refund, but there is if you owe taxes.
The easiest way to avoid this is to file for an extension by the time the deadline arrives.
The Failure To File Penalty depends on how late you file and how much you owe in taxes.
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Your penalty starts as 5% of the unpaid taxes for each month your return is late.
The penalty will never be more than 25% of owed taxes.
There is the Failure To File and Failure To Pay Penalty. That will result in a combined 5% from the IRS for each month you’re late.
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After 5 months go by, the Failure To File Penalty maxes out, but the Failure To Pay will rise up to 25% over time.
The minimum you’ll pay at 60 days or later is $435 or 100% of the taxes owed, whatever is less.
You could also be charged with interest.
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