The late-payment penalty is $1,500 (six months late x 0.5% per month x $50,000). A late-payment penalty applies because you did not pay 90% of your tax liability on April 18, 2023. You file your 2022 tax return on the extended due date of October 16, 2023, with full payment. Suppose you file an extension by April 18, 2023, but cannot pay any of your tax balance due. If you can’t pay in full, you should file your tax return or extension and pay as much as possible.Īn example of late payment and late-filing penalties: Assume your 2022 tax liability estimate is $50,000. It should help avoid the late-filing penalty, which is ten times more than the late-payment penalty. Tip 3: File an automatic extension even if you cannot payĮven if you can’t pay what you estimate you owe, file the automatic extension form on time by April 18, 2023.

Don’t attach the statement to Form 4868.”Ĭheck these types of penalties with your state, too. Attach a statement to your return fully explaining your reason for filing late. You might not owe the penalty if you have a reasonable explanation for filing late. If your return is more than 60 days late, the minimum penalty is $450 (adjusted for inflation) or the balance of the tax due on your return, whichever is smaller. The penalty is usually 5% of the amount due for each month or part of a month your return is late. The remaining balance is paid with your return.Ī late filing penalty is usually charged if your return is filed after the due date (including extensions).

At least 90% of the total tax on your 2022 return is paid on or before the regular due date of your return through withholding, estimated tax payments, or payments made with Form 4868. You’re considered to have reasonable cause for the period covered by this automatic extension if both of the following requirements have been met. Attach a statement to your return fully explaining the reason. The late payment penalty won’t be charged if you can show reasonable cause for not paying on time.

Download 4868 tax extension form