The Internal Revenue Service started the tax season back on January 29, 2024. Many have already their tax refund money. The IRS will accept tax returns through April 15, 2024.
Therefore, the IRS recommends filing your 2023 tax return before that due date. Not doing so could result in penalties. What is more, you could request a filing extension.
By doing so, you cannot pay your taxes later. This will only allow you to file your 2023 tax return through October 15. Maine and Massachusetts have their deadline to file on April 17.
THE IRS WARNS OF THE FAILURE TO FILE PENALTY
The Failure to File penalty will apply when you do not file your tax return by April 15, 2024. For your information, this penalty will be negative from a financial point of view.
As a matter of fact, the Failure to File penalty means you must pay a percentage of the taxes you did not pay on time. The IRS will send you a Failure to File penalty notice if you do not file on time.
It will depend on how late you file your tax return. But the worst thing is that there is interest on a penalty. The IRS charges interest on penalties. So, it would be wise to file as soon as possible.
HOW MUCH COULD THE PENALTY BE?
The total amount will depend on the money you owe. Anyway, the IRS claims that the penalty will not exceed 25% of the taxes you did not pay. Generally, it is 5% of the unpaid taxes for each month or part of it your tax return is late.
Failure to File is not the only penalty. Some taxpayers may have to face a Failure to pay penalty too. Therefore, it is advisable to pay all your taxes in full to stop interest from going up and to avoid future penalties.
Do you think you have a reasonable cause not to file on time? If you can prove it, the IRS may reduce the penalties or even remove them if you qualify for a penalty relief for reasonable cause.