Friend 1: “Oh crap, I forgot to pay my income taxes by April 18!”

Friend 2: “Hey, don’t worry, you’re not alone. I mean, who can keep track of all those deadlines anyway? And let’s be honest, paying taxes is not exactly the most exciting thing in the world. It’s like going to the dentist – you know you must do it, but keep putting it off until the last minute.

Friend 1: “But wait, won’t the IRS come after me if I don’t pay on time?”

Friend 2: “Maybe, but think of it this way – you’re just giving the IRS a little extra time to appreciate your hard-earned money.” “if you pay your taxes on time, the IRS just takes your money and uses it to fund things like roads and schools. But if you don’t pay on time, you’re giving the IRS a chance to savor that cash.”

“And if you’re bold, you could even try negotiating with the IRS. Maybe offer to pay a little extra if they promise to spend it on something fun, like a giant inflatable slide for the office. They might take you up on it (or audit you, but let’s not think about that).”

“It’s not the end of the world. Just be sure to get it done before the IRS sends out the tax-collecting ninjas (yes, those are a thing).”

Yes, you can extend your return until October 15. However, there are penalties for not paying 100% of your tax.

YOU CAN NOT EXTEND THE TIME TO PAY THE TAX.

The Tax Law

The IRS penalties for not paying 100% of your individual income tax on or before April 15 vary depending on the amount of taxes owed and the length of time the taxes remain unpaid. The penalties are:

1. Failure-to-Pay Penalty: This penalty is if you don’t pay the total amount of tax you owe by April 18. The penalty is 0.5% of the unpaid taxes for each month (or part of a month) that the tax remains unpaid, up to a maximum of 25% of the unpaid tax.

AVOID IRS TAX PENALTIES

2. Late Payment Penalty: If you don’t pay your taxes by April 15, you’ll also be charged a late payment penalty of 0.5% per month (or part of a month) on the unpaid tax amount. This penalty is separate from the failure-to-pay penalty and has a maximum of 25% of the unpaid tax.

3. Interest Charges: Interest is charged on any unpaid tax from the due date of the return until the payment date. The interest rate is determined quarterly and is the federal short-term rate plus 3%.

It’s important to note that the failure-to-pay penalty and the late payment penalty can be applied simultaneously, and the interest charges can add up quickly over time.

Paying your taxes on time is always best to avoid these penalties and charges.

Are you behind and need to file an extension?

Then contact Tannery Company, and we can guide you through filing the extension, paying the tax due, and avoiding penalties.

Call us at 214-239-4700 or click to set up a ZOOM MEETING


Michael Tannery CPA CDFA® AIF® ● CEO
Registered Principal | Tannery & Company

 Be A Financial Olympian™

 The opinions expressed in this material are for general informational purposes only and are not a substitute for professional advice.  Individual circumstances do vary. Independent Financial Group (IFG) does not give tax advice. IFG Registered Representatives (RR) do not give tax advice while acting as a RR. These matters should be discussed with your tax professional.

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