Missed the April tax deadline? Here’s when to file to avoid a bigger penalty
STATEN ISLAND, NY — If you missed the April tax deadline, the Internal Revenue Service (IRS) is advising taxpayers to file quickly to avoid a larger penalty.
To avoid a larger penalty, the IRS is asking taxpayers to file their 2021 federal income tax returns and pay any taxes owing by Tuesday, June 14. This means that a return sent by mail on this date will not be admissible.
For this reason, the IRS urges everyone to file electronically by Tuesday.
Additionally, taxpayers can also limit late payment penalties and interest charges by paying their taxes electronically. The fastest and easiest way to do this is with IRS direct paymenta free service available only on IRS.gov. Several other electronic payment options are also available.
Those who miss this June 14 deadline will normally face a minimum late-filing penalty, also known as a non-filing penalty. By law, if the return is more than 60 days late, the minimum penalty is $435 or 100% of the unpaid tax, whichever is less.
This means that the penalty will equal the tax owed if the taxpayer owes $435 or less, according to the IRS. If he owes more than $435, the minimum penalty will be at least $435.
According to the normal calculation, this penalty is 5% of the unpaid tax for each month or part of a month of late declaration, up to a maximum of 25%.
The late-filing penalty will cease to accrue once the taxpayer files their case. In addition, the late penalty and separate interest will cease to accrue as soon as the tax is paid. The taxpayer does not need to understand any of these charges. Instead, the IRS will charge them for any amount owed.
Many taxpayers mistakenly delay filing because they are unable to pay what they owe, the IRS explained. Often these taxpayers are eligible for one of the Payment options available from the IRS.
An installment agreement, or payment plan, allows a taxpayer to pay over time. People who owe $50,000 or less in taxes, penalties, and interest combined can apply for a payment plan using the IRS Online payment agreement application.
Those with a balance below $100,000 may also qualify for a short-term payment plan of up to 180 days. The plan can be set up in minutes and applicants receive immediate notification of approval. To reduce the risk of default and avoid having to write and mail a check each month, taxpayers can select the direct debit option to make these payments.
Offer in Compromise
Some distressed taxpayers may qualify to settle their tax bill for less than the amount they owe by submitting an Offer in Compromise. To help you determine your eligibility, use the Bid in Compromise Pre-Qualification Tool.
Visit IRS.gov/payments for more details.