The penalties for not filing or paying income taxes can range from around half a percent of the amount due per month, up to 25 percent of the total amount. Find out how IRS fines for unpaid taxes are compounded every year with information from a tax consultant in this free video on taxes.
Hi, we're here to talk about IRS penalties, everybody's favorite topic. The IRS can levy some fairly substantial penalties, for both not filing and not paying your taxes, up to 25% of the amount of tax due, and the amounts are compounded year after year, so if you let it go more than a year, it will snowball on you. The IRS typically will work with you to establish a payment program, or the other option is, if you're figuring your taxes, and you're looking at not paying them because you don't have the money available, sometimes it's more cost effective to use a credit card with a cash advance, and pay your taxes, than it is to incur the penalties, and let that roll up into a compounded amount of money, that far exceeds the interest rate on your credit card. The IRS has a couple of penalties. There's a penalty for not filing and there's a separate penalty for not paying, so even if you don't pay, if you file , you'll eliminate one of the two penalties. The penalty for not filing is 5% per month, up to 25% of the total amount, of taxes due. The penalty for paying late, is half a percent per month, up to 25% of the amount due.