When it comes to late tax filing, filers fall into two categories; late filers and late payers. Some however, fall into both.
Did you forget to file your 2013 tax return? If so, you’re officially filing late (as of April 16, 2014) and will face late penalties.
If you filed an extension and have tax due, you’re not free from incurring late payment penalties. However, if your expecting a refund whether you filed an extension or not, then you won’t have to worry about paying late penalties.
The IRS failure-to-file and failure-to-pay penalties increase as time passes. Instead of dishing out extra money to the IRS, you can file your late 2013 taxes on PriorTax.com and avoid additional late penalties.
Wondering what your late fee will look like? Your specific situation will determine which late penalties you’ll face. Below, find the circumstance which describes your filing status best;
You’re filing late
If you have tax due and didn’t file by the tax deadline, then you’ll face a failure-to-file penalty. For each month (or portion of each month) your taxes are left unpaid, the penalty is 5% of your tax due amount. The maximum penalty is 25%.
If you wait more than 60 days after the April 15th deadline, then you’ll end up paying (at the very least) $135 or 100% of your unpaid tax (whichever is smaller).
If you are expecting a refund, you won’t be fined for filing late. However, be sure to file your 2013 return by April 15, 2017 or you’ll be kissing your unclaimed refund goodbye.
As mentioned above, the failure-to-file IRS penalty is usually more severe than the failure-to-pay penalty. So if you’re avoiding filing because your financial situation is on the rocks and you can’t pay your tax due yet, file your late tax return now and pay the tax due later.
You filed on time but still need to pay your tax due
If you filed on time (or requested an extension) but still need to pay your tax due, you’ll end up paying a failure-to-pay penalty of ½ of 1% of your unpaid taxes for each month starting April 16, the day after the tax deadline.
If you find yourself in a situation and can’t pay your tax due, the IRS will set up a payment plan method that works for you. The key is to communicate with the IRS and pay as much as possible, as soon as possible.
You didn’t file and also didn’t pay your tax due
If you still need to file your 2013 tax return as well as pay your tax due, you won’t incur both a failure-to-file penalty and failure-to-pay penalty. You’ll face solely the failure-to-file penalty-5% of your unpaid tax due amount.
The maximum penalty for late filing and late paying is 25% of your tax due.
You requested an extension to file your taxes late
If you requested an extension to file your taxes, you won’t face late-filing fees (as long as you file by October 15th). However, if you have tax due, you will still face late-payment fees, regardless of your 6 month extension.
If you have unpaid tax due and have yet to pay, you’ll face failure-to-pay penalties; ½ of 1% of your taxes due for each month (or fraction of each month) left unpaid.
If you filed an extension before April 15, 2014, then you must file by October 15, 2014. You’ll be able to e-file until then. If you don’t file by the extension date, you’ll face a penalty of 5% of your tax due.
You failed to file and pay because you were out of the country or have a reasonable cause
Like everything in life, there’s always a few exceptions to the rules. When it comes to filing or paying late, if you can show the IRS reasonable cause for your failure to file or pay on time, the IRS may not penalize you. Additionally;
- If you’re a US citizen and on the April 15th deadline you were out of the country, you automatically received a two month extension.
- This exception applies to US citizens with a main place of business or a post of duty outside of the US or Puerto Rico along with US citizens on military or naval service duty outside of the US or Puerto Rico.
Note: If you’re filing or paying your 2013 tax return late, you might receive a letter from the IRS.
It’s pretty easy to see that the IRS doesn’t mess around when it comes to paying them. If you have a large amount of tax due and you haven’t filed yet, eventually you could end up with a nasty tax bill!
Whatever your tax situation may be, you should file your 2013 taxes today on PriorTax.
Just when you thought PriorTax only prepared previous year tax returns, you were thrown a curve-ball. Yes, PriorTax e-files late 2013 returns (until October 15, 2014). What are you waiting for? Create an account today!
4/30/2014 Photo via wsssst on Flickr