Will the IRS Penalize You When You File Taxes Late?
If you file your IRS Form 1040 after the deadline, whether or not the IRS penalizes you depends on whether or not you owe any taxes. If you don't owe any taxes, you will not be penalized. If you do, however, IRS penalties apply, and they increase the longer you delay filing your return.
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Deadline
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The deadline for filing an individual income tax return is April 15 of the year following the year for which you are reporting income. As long as your return is postmarked by April 15, it doesn't matter when the IRS actually receives it -- you will not be assessed a penalty for late filing.
Automatic Extensions
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If April 15 hasn't arrived yet but you anticipate filing late, file IRS Form 4868 with the same IRS Service Center that handles your return. The IRS routinely grants six-month filing extensions for those who file Form 4868, and you need not convince the IRS that you have a good reason. Although the IRS will waive late filing penalties for six months, late payment penalties will still apply if you owe any money with your tax return.
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Late Filing Penalties
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The IRS penalty for late filing is 5 percent of the outstanding amount, for every month or portion of a month that your return is late, up to a maximum of 25 percent. For example, regardless of whether you file on April 19 or May 4, you will be assessed a 5 percent penalty. If you file on May 18, however, you will be assessed a 10 percent penalty. The penalty for failure to pay, as opposed to mere failure to file, is 0.5 percent of the outstanding amount per month or portion of a month, up to a maximum of 25 percent. Both penalties will not be assessed at the same time -- you will have to pay only the larger of the two. Once you miss the April 15 filing deadline, the IRS will calculate the number of days your return is late is based on when it actually received your return, not when you mailed it.
The 60-Day Rule
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Once your return is 60 days late, the IRS will invoke a minimum penalty of $100 or 100 percent of the amount you owe, whichever is less. This minimum penalty is calculated according to the number of days your return is late, not the number of months, meaning that you have until June 14 to make sure your return is received by the IRS.
Reasonable Cause
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The IRS will consider waiving penalties if you can establish "reasonable cause" for failing to file your return on time. The IRS is strict about this exception, however -- it will never entertain poverty as an excuse. If your mother died on April 14, or if the area where you live was declared a federal disaster area around the time of the filing deadline, you may be able to establish reasonable cause if you can provide documentary evidence.
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References
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