Clock Ticking to Tax Deadline

By: Erin Tate
By: Erin Tate

Taxes are one of the few sure things in this life, and not paying them on time could cost you even more.

"The penalty could be quite significant if you fail to file and fail to pay. But you could avoid the late filing fee which is the more substantial penalty by filing for the extension," said Tax expert Ron Cereola.

Cereola says if you haven't done your federal taxes yet, your best bet is to file for an extension, which will automatically grant you four extra months to file.

Millions do it each year. He says it's simple and it'll save you a lot of money.

"The late filing penalty could be significant. It's five percent per month for every month up to 25 percent of the tax that's due," he says.

That means if you owe $100 in tax and you're up to one month late, the past due filing fee would be five dollars. The next month, you'd owe another five percent until you reached the maximum penalty of 25 percent, or in this case, $25.

But there are more fees to consider.

"The extension is just an extension to file, not an extension to pay," Cereola warned.

If you're late paying, you'll owe an additional fee plus interest on your unpaid balance. But there's good news.

If you can't pay all that you owe, Cereola says make a partial payment and then those penalties won't be so severe.

"Contact the IRS and they'll set up a monthly installment agreement with you," Cereola said.

And if you're expecting a refund, Cereola says you should see it in two to four weeks, depending on how you file.


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