It’s that dreaded day—the day your income taxes are due—which usually falls on April 15th. If the 15th happens to fall on a weekend or a holiday, the tax deadline shifts to the first business day after the 15th. But what happens if you miss the tax deadline, regardless of the day it falls on? Don’t worry, it’s not the end of the world.
Penalties
It may not be the end of the world, but you may end up paying penalties for missing that deadline.
- The failure-to-file penalty, as it is known, is 5% of the unpaid taxes for each month that the taxes are late, but it will not exceed 25% of those unpaid taxes.
- Not to be confused with the failure-to-file penalty is the failure-to-pay penalty. This one is less at 0.5% of the unpaid taxes for each month that the payment is late. Again, it won’t exceed 25%.
But, if you’re late both filing and paying, you’ll pay the 5% each month unless…
- …your tax return is over 60 days past the deadline. At this point, the minimum penalty is the lesser of $450 or 100% of the tax due.
Filing an Extension
If you know you’re going to miss the tax deadline, save yourself the trouble of paying (and calculating) those penalties by filing an extension. You can file Form 4868 either by e-file or filling out the paper form. It must be filed by your original tax deadline (April 15th) and gives you an extension of six months, which means you must now file by October 15th.
**But please keep in mind, this is only an extension for filing your taxes. The payment of your taxes is still due on April 15th and should have been paid through either tax withholding from your paycheck or the payment of estimated taxes throughout the year.
If you underpay your estimated taxes, you may need to pay penalties and/or interest on the underpayment.
If you overpaid, congratulations, you’re getting a refund!
California Tax Deadline
California state tax deadlines and extensions are typically the same as the federal deadlines, and it’s just easier to do them all at once. And yes, the state has penalties for late filing and late payment as well.
If you need help making those deadlines or filing extensions, give one of our tax preparers a call.