IRS Penalties For Late Filers

What are the penalties of you do not file your 1040 on time?

  • In general, the IRS penalty is 5% of the tax due per month.
  • The maximum penalty is 25% of the balance due.
  • There is a minimum penalty that applies if you file more than 60 days late.
  • If you file more than 60 days late and you owe $135 or less, the penalty is 100% of the tax you owe.

What is the definition of late?

  • For a 1040, the return is late if it is not filed by the 15th day of the fourth month following the end of the tax year (in other words, April 15).
  • If you can’t finish your 1040 by April 15, you can file for an extension by that date.
  • The extension gives you until the 15th day of the tenth month (October 15) to file the 1040.
  • If you file an extension you can avoid the late payment penalties if two conditions are met:
    • You paid at least 90% of your tax liability by April 15
    • You pay the rest with the 1040 on or before October 15

Penalties are computed based on the tax you owe with the 1040.

For more information, contact our office.

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