What happens if you do not pay your taxes by April 15?
The IRS has several options available to taxpayers who cannot pay their taxes in full on the tax day deadline.
Paying Taxes Late Failure to Pay Penalty
If you owe a balance due after 4/15, the current Failure To Pay penalty rate is 1/2% of the tax liability per month or part of a month. The current interest rate is 3% per year, charged on the unpaid tax and penalties, and it’s compounded daily. Ideally, the Service wants you to pay in full on time regardless of how (cash or credit). If you use a credit card to full-pay, the service providers shown here charge what the call convenience fees per transaction in addition to their interest.
Paying Less Than Full Tax Balance before April 15
If you pay less than the full balance on 4/15, the IRS will process your return and send you a notice asking for full payment of the remaining unpaid tax and the initial charges of P&I. If you can pay that notice balance by the due date, you’re done. The IRS can also offer you up to 120 days to full-pay. The IRS calculates out the payoff figure through 120 days, and during that time there’s no requirement for a monthly payment. You could make one payment or one hundred payments, as long as the balance due was paid in full by the 120th day, and then you’re done.
Who owes taxes on April 15 Deadline?
Oftentimes people have to pay tax at the end of the tax year because they are not properly withholding for taxes throughout the year. This might mean they are taking to many exemptions or a life event has occurred that requires them to change the amount that is withheld from each pay check. You can adjust the amount withheld from each paycheck by filling out form W-4. See the following for more information about changing paycheck withholding on Form w-4.