What are the penalties for filing and paying my taxes late?

Tax_questionQ) What are the penalties for filing and paying my taxes late?

A) The penalties for filing and paying your taxes late can be significant. The IRS charges a penalty for each month that you file your return late, and a penalty for each month that you pay your taxes late. The amount of the penalty depends on the amount of tax that you owe.

Penalties for Filing Late

  • Individuals: 5% of the tax owed for each month or part of a month that the return is late, up to a maximum of 25%.
  • Corporations: 5% of the tax owed for each month or part of a month that the return is late, up to a maximum of 25%.

Penalties for Paying Late

  • Individuals: 0.5% of the tax owed for each month or part of a month that the tax is late, up to a maximum of 25%.
  • Corporations: 0.5% of the tax owed for each month or part of a month that the tax is late, up to a maximum of 25%.

In addition to the penalties for filing and paying late, the IRS may also charge you interest on the amount of tax that you owe. The interest rate is currently 3% per month, compounded daily.

If you are unable to file or pay your taxes on time, you should contact the IRS as soon as possible. The IRS may be able to waive the penalties if you have a good reason for being late.

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