The 2023 tax season is about to end this April 18. It is important that you file your return on time, otherwise you will be penalized for failing to meet your tax obligations before the due date.
When a taxpayer defaults, you receive a notice or letter from the Internal Revenue Service (IRS) notifying you that you must pay a penalty, where the amount is a percentage of the taxes that were not paid on time.
The tax agency calculates the penalty for not filing the tax return based on how long it takes the taxpayer to file their return and the amount of tax not paid as of the original payment due date (not the expiration date of the extension). Unpaid tax is the total tax shown on the return less amounts paid through withholding, estimated tax payments, and refundable credits allowed.
The penalty for not filing the return is 5% of the taxes for each month or part of a month in which it is late in presenting said return. The penalty will not exceed 25% of your unpaid taxes.
If after 5 months the payment still has not been made, the penalty for not filing the tax return will reach the maximum amountbut the penalty for not paying will continue until you pay the tax, up to a maximum of 25% of the unpaid taxes on the due date.
If the taxpayer delayed filing his return for more than 60 days, the minimum penalty for not filing the tax return will be $435 (for tax returns due in 2020, 2021, and 2022) or 100% of the tax required to be shown on the return, whichever is less.
The IRS also charges interest on the fine.. The date from which you begin to collect interest varies depending on the type of fine. Interest increases the amount of the debt until the taxpayer pays the balance in full.
If you need more time to prepare your tax return, request an extension of time to present it. This does not give you an extension of time to make the payment. A payment plan can help you pay with more time.
If you can’t pay your taxes or penalty in full on time, pay what you can now and request a payment plan. By setting up a payment plan, you may be able to reduce penalties in the future.
For help with a ticket, call the phone number on your notice. If you did not receive a notice, use telephone support.
For more details on penalties for not filing on time, go here.
Keep reading:
· 7 Tax Myths American Taxpayers Need to Know
· Avoid costly mistakes when filing your taxes in 2023: important tips and precautions
· How much money is the IRS refunding on average per tax return this year?
