If the amount is substantial and you just don’t have the money available to pay what you owe in full, you may want to look into setting up a payment plan with the IRS. You can always get money back later if you realize there was a mistake. If something doesn’t seem right with your taxes and the deadline is looming you may still want to file an extension so you can have a little more time to go over your return, but at the very least you better mail the check for the amount it says you owe right now. The interest is calculated based on how much tax you owe, computed daily, at a current rate of 4 percent per year.Īs you can see, not paying by the deadline can make matters even worse, so the sooner you realize you owe money, the faster you should get going on coming up with the cash to pay by the deadline. Second, the IRS assesses interest on unpaid taxes. The penalty is calculated from the original payment deadline. There is no maximum limit to the failure-to-pay penalty. The penalty is 0.5% for each month the tax is not paid in full. When you don’t file your taxes on time you’re hit twice.įirst, there is a failure to pay penalty. An extension does give you additional time to file your return, but it does not extend the payment deadline. You can just file an extension and get more time, right? Sadly, that isn’t how it works. Here’s what you need to know.Ībove all else, you need to pay what you owe by the tax filing deadline, which this year is April 18 th. It’s obviously better to get a refund or pretty much break even, but there are times when things change and you use TurboTax to figure out what you owe, you need to come up with some extra cash. So you’ve sat down and filled out your tax return this year, but now you’ve got another problem.
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