Tax Day is over and maybe you filed an extension to file your taxes. However, an extension to file your taxes doesn't mean it is an extension to pay your taxes.
If you’re going to file an extension, you need to know what to look out for so you can avoid unnecessary penalties. There are different penalties for not filing your taxes versus not paying them. If you don't file, you could face a failure-to-file penalty (hence filing EXT is important).
The penalty is 5% of your unpaid taxes each month your tax return is late (Up to five months). If you file more than 60 days late, you'll pay whichever is less:
A minimum of 100% of the taxes you owe
"A specific dollar amount that is adjusted annually for inflation", explained by the IRS
If you file your taxes but don't pay them, the IRS could charge you a failure-to-pay penalty. The IRS will charge you 0.5% of your unpaid taxes for each month you don't pay (up to 25%). Interest also generally accrues on your unpaid taxes. The interest rate is equal to the federal short-term rate, plus 3%.
If you need help or have any additional questions, please do not hesitate to call us at (832) 295-3353. You may also set up an appointment with us at https://xqcpa-bookme.acuityscheduling.com/schedule.php.