The tax deadline was May 17th this year. Taxpayers who submitted an extension have until October 15 to file and do not face the failure to file penalty if they file their taxes by that deadline. But taxpayers need to remember that an extension to file is not an extension to pay. Any taxes they owed after the May 15 deadline are subject to the failure to pay penalty and interest.
Taxpayers who didn’t request an extension, and still owe taxes, face both the failure to file and the failure to pay penalties. They should file now and pay what they can before larger penalties take effect after July 16th.
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 or part of a month that a tax return is late, up to 25% of the unpaid tax. However, if the 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 the unpaid tax, whichever is less. This year, that important 60-day date occurs after July 16th. In addition to penalties, interest will also be charged on any tax not paid by the May 17th due date.
There are options for taxpayers who owe but can’t pay the full amount. Qualified taxpayers can choose to pay any taxes over time through a payment plan, including an installment agreement that can be set up in a matter of minutes on IRS.gov. (Short term is less than 180 days and long term for 7 months or more)
Remember, if a refund is due, no penalty is charged on the late return filed by a taxpayer.
If you have a three year history of filing/paying on time, (2017,2018,2019) You can qualify for the First Time penalty abatement. You would need to file IRS Form 843. You can abate the penalty but NOT the interest.