“What are the penalties for not filing taxes?”==================In general, the law imposes penalties to ensure that all taxpayers pay their taxes. If you underpay your tax due to fraud, you may be subject to a civil fraud penalty. In certain cases, you may be subject to criminal prosecution. Failure-to-file penalty; If you do not file your return by the due date (including extensions), you may have to pay a failure-to-file penalty. The penalty is 5% of the tax not paid by the due date for each month or part of a month that the return is late. This penalty cannot be more than 25% of your tax, but it is reduced by the failure-to-pay penalty for any month both penalties apply. However, if your return is more than 60 days late, the penalty will not be less than $100 or 100% of the tax balance, whichever is less. You will not have to pay the penalty if you can show reasonable cause for not filing on time. Failure-to-pay penalty; You may have to pay a penalty of 1/2 of 1% of your unpaid taxes for each month or part of a month after the due date that the tax is not paid. This penalty cannot be more than 25% of your unpaid tax. You will not have to pay the penalty if you can show good reason for not paying the tax on time. ALSO, you may have to pay a penalty of $500 if you file a return that does not include enough information to figure the correct tax or that shows an incorrect tax amount due to: A frivolous position on your part, or A desire to delay or interfere with the administration of federal income tax laws. An accuracy-related penalty of 20% applies to any underpayment due to Negligence or disregard of rules or regulations, or Substantial understatement of income tax; Substantial understatement of income tax. For an individual, income tax is substantially understated if the understatement of tax exceeds the greater of 10% of the correct tax, or $5k. |