This video will go over the types of penalties for not filing on time or paying your taxes on time.

The 2019 filing deadline for individual income tax returns is April 15, 2020. If you file an extension, you have till October 15, 2020, to file your tax return.

This video into separated into two sections: Late Filing Penalties and Late Payment Penalties.

1. Late Filing Penalties
If you don’t file your tax return or an extension on time, you may owe a penalty for late filing. If you’re due a tax refund, you will not be penalized for filing late because ate filing penalty is based on how much in taxes you owe.

The late filing penalty is 5% of the taxes due for every month your return is filed late, up to a maximum of 25%. If you file more than 60 days after the due date, which would be Sunday, June 14, 2020, the minimum late filing penalty will be $330 or 100% of unpaid tax, the lesser of the two.

2. Late Payment Penalties
If you didn’t pay all taxes due for 2019 by April 15, 2020, regardless of if you filed an extension, you will owe a late payment penalty.

The late payment penalty is half a percent of the additional tax owed for every month the owed tax remains unpaid, up to a maximum of 25%. For any month for which both the late payment and late filing penalty apply, the 0.5% late payment penalty is waived. Interest, compounded daily, starts accumulating on unpaid taxes one day after the original due date of the tax return, April 15, until the bill is fully paid off. The current interest rate is 5% (3% on top of the federal short term rate of 2%).

To help you calculate your estimated tax penalty click here:
https://www.irscalculators.com/irs-pe...

Music: Youtube Audio Library - Carefree by Kevin MacLeod
Email: [email protected]

This video is for entertainment and informational purposes only and should not be considered tax advice. By watching or commenting on this video, we are not forming a professional relationship. If you seek specific tax advice, please consult a CPA from your local area.