The tax deadline was July 15 this year. Taxpayers who submitted an extension have until Oct. 15 to file and do not face the failure to file penalty if they file their taxes by the deadline.
But taxpayers need to remember that an extension to file is not an extension to pay. Any taxes owed after the July 15 deadline are subject to the failure to pay penalty and interest.
Those taxpayers who didn’t request an extension, and still owe taxes, face both the failure to file and failure to pay penalties.
The penalty for not filing a federal tax return by the due date, or extended due date, is generally 5% of the unpaid tax for each month that the tax return is late, up to 25% of unpaid tax.
If return is more than 60 days late a minimum penalty applies. If no return has been filed after 60 days, the minimum penalty that can be charged is $435 or 100% of unpaid tax whichever is less.
Remember, if a refund is due, no penalty is charged on the late return filed.