Late deadline means extra days to file taxes
The tax filing deadline is April 18 this year, giving taxpayers three extra days to file a return or apply for an extension and pay any tax due before those penalties kick in.
This year, the normal filing deadline of April 15 falls on a Saturday. Because Emancipation Day is observed in Washington, D.C. on the next business day, the deadline moves to Tuesday, April 18.
Taxpayers must either file a completed return or apply for an extension by April 18 and pay at least 90% of their tax liability to avoid penalties and interest.
The penalty for not filing a tax return is 10 times greater than the penalty for not paying in full. The best way to avoid this penalty, which could add up to 25% to a person’s tax bill, is to file a completed tax return or apply for an extension. However, an extension doesn’t apply to any payments due.
The penalty for not paying in full is 0.5% of the unpaid balance per month, with a maximum of 25%. The monthly penalty for not filing a tax return is 5% and is capped at a maximum of 25%. For example, for someone who owes $1,000, the failure-to-pay penalty starts at just $5 per month, but the penalty for failing to file a return starts at $50 per month.
If a taxpayer can’t pay the balance due all at once, he or she may request a short-term extension to pay, make an installment agreement or even pay with a credit card. In some instances, the taxpayer may qualify for an offer-in-compromise. By working with the IRS, taxpayers may reduce or eliminate their penalties.