Eight things to know about failure to file or pay taxes on time
The IRS tells us that there is hope so don’t despair but:
1. If you haven’t filed by April 17th this year you might incur the failure-to-file penalty and likewise if you didn’t pay there is the failure-to-pay penalty. Now you officially have tax troubles.
2. The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return on time and pay as much as you can, then explore other payment options. The IRS will work with you.
3. Late filing penalty is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late but not to exceed 25% of your unpaid taxes.
4. If you file your return more than 60 days after the due date or extended due date then the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
5. If you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of half of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes.
6. If you request an extension of time to file by the tax deadline and you paid at least 90 percent of your actual tax liability by the original due date, you will not face a failure-to-pay penalty if the remaining balance is paid by the extended due date.
7. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
8. You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect.
What to do about the tax problem
This is where you have to put your thinking cap on and figure out how to save your self as much money as possible. Here is some good info on Accounting Software.
Here is some information about Tax Filing Software. Be prepared for next year at least.