If you filed an application to extend the due date of your 2009 federal individual income tax return, the filing deadline is near. Your 2009 income tax return must be mailed and postmarked on or before October 15, 2010.
Taxpayers who file their tax returns after the deadline will receive notices from the IRS that assess penalties and interest if there is income tax due. The applicable penalties are:
- Failure-to-File Penalty
- Failure-to-Pay Penalty
Since penalties are calculated on the amount of tax due, there are no penalties for returns with refunds or no tax due. The failure-to-file penalty calculation is 5% of the unpaid tax balance for each month the return is late limited to a maximum of 25%. The penalty is based on the tax not paid by the due date (April 15th) without regard to extensions. If the return is more than 60 days late, the minimum penalty is the lesser of $100 or the tax due.
The failure-to-pay penalty is .5% of the tax due for each month since April 15th or part of a month there is an unpaid balance up to a maximum of 25%. If both penalties apply, the failure-to-file penalty is reduced by the failure-to-pay penalty.
You may request abatement of penalties if you can convince the IRS that you had “reasonable cause” for missing the deadline. See IRS Publication 17 at www.irs.gov for more details.