Today Robyn from Atlanta, GA goofed. She asks, “What happens if you do not file an extension and you are late sending you taxes in? What percentage are you charged?”
If you have a refund, there are no consequences for Federal taxes. I don’t know the costs for GA. (California does charge penalties, even if you have a refund due. But few states are that hostile to their taxpayers.)
If you have a balance due?
Expect to pay:
5% per month late filing penalties
5% per month late payment penalties
Both up to 25% of the balance due
and 6% or 7% interest on all the taxes and penalties.
Not really appealing. So, if you owe, file by the 15th. You’ll save at least the last month’s penalties.
If you HAD filed the extension, you’d have saved the 25% late filing penalties. BUT, your late payment penalties would have dropped by a factor of 10. They’d be .5% – that’s only ½ a percent, instead of 5%. Big difference!
That one little piece of paper, that extension, can be worth a fortune. Never forget to file it again – even if you can’t afford to pay.
You’ll find answers to all your tax problems – and all kinds of tax information, when you need it, where? At TaxMama.com
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