Why it’s important to meet the tax return filing and payment deadlines

The May 17 deadline for filing your 2020 individual tax return is coming up. It’s important to file and pay your tax return on time to avoid penalties imposed by the IRS. Here are the basic rules. Separate penalties apply for failing to pay and failing to file. The failure-to-pay penalty is 1/2% for each month (or partial month) the payment is late. The maximum penalty is 25%. The failure-to-file penalty is a more severe rate of 5% per month (or partial month) to a maximum of 25%. If you obtain an extension to file (until Oct. 15), you’re not filing late unless you miss the extended due date. However, a filing extension doesn’t apply to your responsibility to pay. Contact us with questions.