Federal Tax Returns Submitted By June 14 Will Avoid Additional Penalties

by Mindy Cohn

Those who missed the April 18 deadline for filing 2022 federal income tax returns should file by June 14 to avoid an even more significant late-filing penalty.

By filing your tax return as soon as possible, you can reduce the penalties even if you can't pay the tax due.

After a tax return is more than 60 days late, the minimum failure-to-file penalty is $435 or 100% of the tax due, whichever is less. But by paying before the 60-day deadline of June 14, late filers will only have to pay a  5% penalty of the unpaid tax, up to a maximum of 25% for each month or part of a month that the tax return is late until you file.

Those who don't pay the taxes owed are subject to a failure-to-pay penalty of  0.5% of the unpaid taxes for each month or part of a month the tax remains unpaid. The failure-to-file penalty won't exceed 25% of the tax due. After five months, the failure-to-file penalty will max out, but the failure-to-pay penalty will continue for up to 25% of the unpaid tax as of the due date until the tax is paid.

Those who want to pay part of what they owe can apply for one of the two options for IRS payment plans. That would be a short-term, 180-day plan or a long-term payment plan for up to 72 months. Both payment plans can be set up online depending on the amount and type of tax owed.

A first-time abatement program is available for taxpayers who have filed and paid on time without any penalties for the past three or more years.

Those seeking clarification on a tax bill can check their federal income tax account online on the IRS website, which can display personal tax records, allow one to make or view payments, or set up a payment plan.