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LITC

Consequences of Failing to File Your Taxes

With April 15 approaching, it is important to be aware of the filing rules to avoid potential penalties.  Some important points about the different penalties you may face if you file or pay your taxes late:

  1. If you do not file your taxes by April 15, you might face a failure-to-file penalty. Whereas, if you do not pay your taxes by April 15, you could face a failure-to-pay penalty.
  2. The failure-to-file penalty is typically more than the failure-to-pay penalty.
  3. The penalty for filing late is generally 5 percent of the unpaid taxes for each month, or part of a month that a return is late. This penalty will not exceed 25 percent of unpaid taxes.
  4. The failure-to-pay penalty is typically ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes.

Even if you are unable to pay all the taxes you owe, you should still file your tax return on time and pay as much as you can.  The IRS will work with you if you need to explore payment options.

For more information, visit http://www.irs.gov/uac/Failure-to-File-or-Pay-Penalties:-Eight-Facts

Posted Apr 14, 2015

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