So you forgot to file and wondering about the late fees. Well it depends on a few things. First is the amount of time since the deadline. Every month the fee goes up so it is best to file as soon as possible after the filing deadline. The fee does not cap until you approach 25% of unpaid taxes. This applies to each year you do not file. Read below for the exact details from the IRS.
IRS calculates the Failure to File Penalty in this way:
- The Failure to File Penalty is 5% of the unpaid taxes for each month or part of a month that a tax return is late. The penalty won’t exceed 25% of your unpaid taxes.
- If both a Failure to File and a Failure to Pay Penalty are applied in the same month, the Failure to File Penalty is reduced by the amount of the Failure to Pay Penalty for that month, for a combined penalty of 5% for each month or part of a month that your return was late.
- If after 5 months you still haven’t paid, the Failure to File Penalty will max out, but the Failure to Pay Penalty continues until the tax is paid, up to its maximum of 25% of the unpaid tax as of the due date.
- If your return was over 60 days late, the minimum Failure to File Penalty is $435 (for tax returns required to be filed in 2020, 2021 and 2022) or 100% of the tax required to be shown on the return, whichever is less.
Contact us to get started with filing your late returns. We are here to help.