Difference Between Failure-To-File & Failure-To-Pay Penalties

There is a difference between failing to file your taxes on time and failing to pay your taxes on time.  The law provides that the IRS can assess a penalty on either or both instances, should they occur.

Failure-to-file occurs if you do not file by the tax deadline.  This penalty is generally more than the failure-to-pay penalty, so if you need more time to file, you can file your Tax Extention within minutes, using ExpressExtension, to avoid this penalty.

  • This penalty is generally 5% of the unpaid taxes for each month or part of month it is late, up to 25% of your unpaid tax.
  • If the return is more than 60 days lates, the minimum penalty is $135 or 100% of the unpaid tax, whichever is smaller.

Failure-to-pay occurs if you do not pay by the due date.  Filing a Tax Extension only extends the amount of time to file, NOT to pay any tax due.

  • Generally there is a penalty of  ½ to 1% of your unpaid taxes for each month or part of month after the due date that your taxes are not paid, up to 25% of unpaid taxes.
  • If you filed a Tax Extension and paid at lead 90% of your tax due by the original due date and pay the remaining balance by the extended due date, you will not incur a failure-to-pay penalty.

If both penalties apply in any month, the 5% failure-to-file penalty is reduced by the failure-to-pay penalty; unless your return is more than 60 days late.  The minimum penalty will be $135 or 100% of the unpaid tax, whichever is smaller. If you can show reasonable cause for filing or paying late, the penalties may be waived.

ExpressTaxFilings is an authorized IRS E-File provider and while we do not give tax advice, we do want to make our customers aware of of situations that may affect you during tax season.  Please contact a tax professional for tax advice and questions pertaining to tax laws.

For any questions about E-Filing Form 1099 or W-2, contact the Express Tax Support Center in Rock Hill, SC at 803-514-5155 between the hours of 8am – 6pm EST, Monday through Friday or email support@ExpressTaxFilings.com.

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