What happens if you don’t file on time?

published September, 2014

For an individual, the federal penalty for “failure to file” is 5% of the unpaid balance for each month, or part of month that the return is late, up to a maximum of 25%. (There is no penalty if the return shows no tax due.) If you have a “failure to pay” penalty for the same month(s), the filing penalty is reduced by the failure to pay penalty. California charges up to 25% with a minimum penalty of the lesser of $135 or 100% of the tax due.

For an LLC or S Corporation, the federal penalty for “failure to file” is $195 for each month, or part of a month, up to twelve months, multiplied by the number of members/shareholders during the year (!). If tax is due, the penalty is 5% of the amount due up to a maximum of 25%. California also charges 5% of the tax due for failure to file up to 25%.

If you were on extension but don’t file by the extended deadline, the extension is ‘vacated’ and you go back to the original due date of 3/15 or 4/15. So, if you file one day late, on 9/16 or 10/16, you’re already at the maximum late penalty.

If you owe money too, there is interest and penalties on the amount due.

If you think you won’t be able to get me your materials, let me know soon, and I’ll refer you to someone who would be willing to file your return late for 2013.