Even if you can't pay the IRS what you owe when your return is due, you still have to file your return on time. If you don't, you'll also pay a late-filing penalty along with the taxes you owe.
If you owe tax and you don't file your return on time:
- The late-filing penalty is usually 5% of the tax you owe for each month — or part of a month — that your return is late. This applies up to a maximum of 25% of the tax owed.
- If your return is more than 60 days late, the minimum penalty for late filing is the smaller of these:
- $135
- 100% of the unpaid tax
Interest
Interest is usually charged on any unpaid tax from the due date of the return until the payment date. The interest rate is the federal short-term rate plus 3%. The rate is set every three months, and interest is compounded daily. The interest rate recently has been about 3%.
Interest is also charged on late-filing penalties.
If you file on time but you don't pay the total amount due, you'll usually have to pay a late-payment penalty. This is 0.5% of the tax you owe per month — or part of a month — until the tax is paid in full. You'll be charged up to a maximum penalty of 25% of the tax due.
Read full article from Can't Pay Taxes | H&R Block
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