Expect Big Penalties If You Miss The October 15 Tax Filing Extension Deadline
Perhaps you knew you were going to need more time and you actually filed IRS Form 4868 on or before the April 2019 filing deadline.
Good for you, if you did. That bought you an extra six months to file your tax return. And now, that deadline is here. Believe me when I tell you, there will be many people who will be scrambling right up to the finish line. And, there will be plenty of people who will miss it.
Missing the extension deadline will cost extra-tardy taxpayers plenty. The IRS’ late-payment penalty is normally 0.5% per month of the outstanding tax not paid by the April deadline. The maximum penalty is a whopping 25%.
You may not be aware, but the filing extension only allows you more time to file your tax return, not more time to pay what you owe. So if you owe taxes you are expected to pay at least 90% of your tax liability by the April deadline. But, this year, if you’ve paid at least 80% of what you owe, you might catch a break.
Avoid Late Filing Penalties
You could also be hit with a late-filing penalty (that’s different than the aforementioned late-payment penalty). That could also be 5% of the amount due for every month or partial month your tax return is late. And, again, the maximum penalty is 25% of the amount due.
This is how so many taxpayers end up in big trouble with the IRS. Missing one year of paying the taxes owed can throw many people off-track so badly they just throw up their hands and it turns into multiple years of sticking their heads in the sand and hoping the trouble will just blow over.
Tax problems never just blow over. If you find yourself in a position that’s going to put you in trouble, give us a call. While your tax troubles may seem like an impossible situation to navigate, we help people navigate and make their way through tax problems every day. And, we help keep them on track moving forward.