April 29, 2019

 While the federal income tax-filing deadline has passed for most people, there are some taxpayers who have not yet filed their tax returns. The Internal Revenue Service encourages them to file now, even if they can’t pay to avoid potential penalties and interest.

There are many ways the IRS offers help to taxpayers facing this situation. The IRS offers these simple tips for handling some typical after-tax-day issues:

For those who didn’t file by the April deadline
There is no penalty for filing late if a refund is due. Penalties and interest only accrue on unfiled tax returns if taxes are not paid by April 15, the tax filing deadline this year in most states. Because of local holidays, the deadline for taxpayers living in Maine or Massachusetts was April 17, 2019.

Anyone who did not file and owes tax should file a tax return as soon as they can and pay as much as possible to reduce penalties and interest. IRS Free File is still available on IRS.gov through Oct. 15 to prepare and file returns electronically.

Some taxpayers may have extra time to file their tax returns and pay any taxes due. Some disaster victims, military service members and eligible support personnel in combat zones, and U.S. citizens and resident aliens who live and work outside the U.S. and Puerto Rico, have more time to file and pay what they owe.

For taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year, the IRS provided penalty relief. This means that the IRS is now waiving the estimated tax penalty for any taxpayer who paid at least 80 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two.

What happens to those who wait to file?
Filing soon is especially important because the late-filing penalty and late-payment penalty on unpaid taxes adds up quickly under the law. Ordinarily, the failure-to-file penalty is 5 percent of the tax owed for each month or part of a month that a tax return is late; However, this penalty is reduced for any month where the failure to pay penalty also applies. The basic failure-to-pay penalty rate is generally 0.5 percent of unpaid tax owed for each month or part of a month. For more see IRS.gov/penalties.

But if a return is filed more than 60 days after the April due date, the minimum penalty is either $210 or 100 percent of the unpaid tax, whichever is less. This means that if the tax due is $210 or less, the penalty is equal to the tax amount due. If the tax due is more than $210, the penalty is at least $210.

In some instances, a taxpayer filing after the deadline may qualify for penalty relief. For those charged a penalty, they may contact the IRS and provide an explanation of why they were unable to file and/or pay by the due date.

Additionally, taxpayers who have a history of filing and paying on time often qualify for penalty relief. A taxpayer will usually qualify if they have filed and paid timely for the past three years and meet other requirements. For more information, see the first-time penalty abatement page on IRS.gov.

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