Financial planning Vista CA and accountant San Marcos firm DePauw Johnson offers the following tax information on what happens to American taxpayers who file and pay their taxes late:
If a taxpayer does not file his or her taxes and pay any owed tax money by the deadline, they will be charged penalties. This money owed will be a percentage of the unpaid tax money that they owe for each month that the taxes aren’t paid.
Taxpayers who don’t pay their taxes by April 15th will owe 5% of their unpaid tax money each month for a maximum of five months. This 5% is constituted by a late filing penalty (4.5%) and a late payment penalty (0.5%). A taxpayer who files five months late will incur a 25% penalty – 22.5% for filing late and 2.5% for paying late. The late filing penalties stop at five months; that is, it can’t increase beyond 22.5%. The late payment penalty, however, will continue to rise each month until the taxes are paid (or until it reaches a maximum of 25%). This means that someone who does not file their taxes for 50 months will owe 47.5% in penalties – 22.5% of that for filing late and 47.5% for paying late.
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