Activity: Failure to File Penalty vs. Failure to Pay Penalty

11 unread reply.11 reply.

If you don't file your tax return by the due date and assuming that you owe money, you would be hit with two penalties: failure to file and failure to pay.

• The failure-to-file penalty is equal to 5% of the taxes you owe for each part of a month you're late, up to a maximum of 25% of unpaid taxes. Therefore, this penalty reaches its maximum after a 5-month filing delay. For example, if you're two days late with filing and you owe $1,000 in taxes, you could be hit with a $50 penalty. If you're more than 6 months late, the maximum penalty is $250.
• The failure-to-pay penalty is 0.5% of unpaid taxes for each part of a month you're late, up to 25% of unpaid taxes due. This penalty applies even if you file on time but don't pay what you owe. This penalty reaches its maximum after a 50-month delay in payment. For example, if you're two days late with paying and you owe $1,000 in taxes, you could be hit with a $5 penalty (10 times less than the failure to file penalty).

A quick glance at these penalties shows why it's so important that you file your taxes on time, even if you can't pay on time. In most cases, the failure-to-file penalty is 10 times greater than the failure-to-pay penalty.

Most people believe that the Government wants your tax dollars, whereas it seems that it wants your tax return much more than your money. Why do you think that is? Give your opinion.

NOTE: Your reply should be at least 250 words in length (excluding optional references and any quote you decide to include from other sources) and contain original work

Activity: Failure to File Penalty vs. Failure to Pay Penalty

11 unread reply.11 reply.

If you don't file your tax return by the due date and assuming that you owe money, you would be hit with two penalties: failure to file and failure to pay.

• The failure-to-file penalty is equal to 5% of the taxes you owe for each part of a month you're late, up to a maximum of 25% of unpaid taxes. Therefore, this penalty reaches its maximum after a 5-month filing delay. For example, if you're two days late with filing and you owe $1,000 in taxes, you could be hit with a $50 penalty. If you're more than 6 months late, the maximum penalty is $250.
• The failure-to-pay penalty is 0.5% of unpaid taxes for each part of a month you're late, up to 25% of unpaid taxes due. This penalty applies even if you file on time but don't pay what you owe. This penalty reaches its maximum after a 50-month delay in payment. For example, if you're two days late with paying and you owe $1,000 in taxes, you could be hit with a $5 penalty (10 times less than the failure to file penalty).

A quick glance at these penalties shows why it's so important that you file your taxes on time, even if you can't pay on time. In most cases, the failure-to-file penalty is 10 times greater than the failure-to-pay penalty.

Most people believe that the Government wants your tax dollars, whereas it seems that it wants your tax return much more than your money. Why do you think that is? Give your opinion.

NOTE: Your reply should be at least 250 words in length (excluding optional references and any quote you decide to include from other sources) and contain original work