The Punishing Costs of Paying Your Taxes Late


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Examples of really bad ideas: Forgetting your spouse’s birthday, do-it-yourself brain surgery, forgetting your anniversary, and neglecting to file your federal tax return or pay your federal taxes. You may be short on the cash to pay your taxes, but there are better ways to address your tax problem than avoiding it entirely.

The IRS considers failure to file a more serious situation than failure to pay, and the penalties are appropriately greater. Failure-to-file penalties typically accrue at the rate of 5% (4.5% late filing and 0.5% late payment) of your unpaid taxes each month (or partial month) that the return is late, up to 25% of the total taxes owed. If the tax filing is overdue by more than sixty days, you will incur a minimum penalty of $210 or 100% of your unpaid tax, whichever is less.

That is just the penalty payment – you still have to deal …

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