Tax Return 2023: Penalties In Place If You Fail to File Your Taxes on Time

The Failure to File Penalty is applied when a taxpayer does not file the Tax Return 2023 on time. In general, the penalties to be paid are a percentage of the taxes that are not paid on time.

The penalties for failing to file the Tax Return 2023 on time may be dismissed or reduced. This is possible if a taxpayer acts in good faith and proves a probable cause for why the tax returns were not filed on time. However, the interest on the penalties cannot be dismissed or reduced unless the penalty itself is dismissed or reduced.

According to the Internal Revenue Service, penalties can be charged with interest. The date when the Internal Revenue Service (IRS) can start charging interest depends on the type of penalty. An interest increases the amount of tax liabilities that must be paid in the Tax Return 2023. It will only discontinue once the balance is paid in full.

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Calculating Penalties For Not Filing Tax Return 2023 On Time

An article on the Taxes For Expats states that the calculation of the penalties for failing to file the Tax Return 2023 on time depends on how late it was filed. The amount of unpaid tax liabilities as of the original payment deadline is also considered. The unpaid tax liabilities are the amount shown on the tax return without the amounts paid through refundable tax credits, withholding, and estimated tax payments.

Furthermore, the penalties for failing to file the Tax Return 2023 on time amounts to 5% of the unpaid taxes every month. Nonetheless, the penalties will not be more than 25% of the unpaid taxes. In the case that both Failure to File and Failure to Pay penalties must be paid in the same month, the Failure to Pay penalty will be reduced to the amount of the Failure to File penalty for that month.

However, if the unpaid tax liabilities are still not paid after 5 months, the Failure to File penalty will reach its maximum. The Failure to Pay penalty will continue until the tax liabilities are paid. Nonetheless, it will be up to 25% of the unpaid taxes as of the deadline. If the Tax Return 2023 is filed late for 60 days, the minimum Failure to File penalty is worth $435 or 100% of the tax liabilities shown in the tax return, whichever is less.

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