If you missed last months tax filing deadline, even with the extension, you may be feeling anxious about getting hit with late-filing penalties by the IRS. The agency may be willing to give you a break, though, according to a recent news release.
Typically, late tax filers owe a failure-to-file penalty5% of your unpaid tax balance per month. But if you file more than 60 days after the tax filing deadline, your penalty becomes the lesser of $435 or 100% of your unpaid tax balance. If you filed on time but couldnt afford to pay your taxes, the penalty is much smaller, at .5% of your unpaid balance per month.
Heres the good news: If you have a history of filing and paying your taxes on time, the IRS may be willing to waive some penalties through its first-time penalty abatement. The agency may also offer penalty relief for a reasonable causewhich includes things like natural disasters, no access to your records or a family members death or illness.
To qualify for the first-time penalty abatement, youll need to meet the following criteria: three years of on-time filing and tax payments; an up-to-date tax filing or filing extension; and that you have paidor have arranged to payany money you owe. If the IRS approves your request for relief, it will also waive the interest accruing on your penalty.
If you have received a failure-to-file notice from the IRS, look for the toll-free number in the top right-hand corner. You can call the agency to see if you qualify for relief through abatement or another waiver. You may improve your chances of relief by making the request after paying your tax balance. If you prefer to put the request in writing, you may also contact the IRS by mailbut it may take up to 30 days to get a response.read more
How to Avoid Paying a Penalty If You Missed the Tax Filing Deadline
