How Interest is Determined
When you’re late filing or paying your employment taxes to the IRS, penalties and interest charges will be will be triggered and assessed. Navigating the waters of IRS tax code can be an extremely tricky proposition – thankfully, we have compiled a helpful guide to understanding how the IRS calculates interest. Keep reading to find out more.
Late Filing/Failure to File Penalties
Late filing penalties are assessed on those who tax but did not file on time. These are also known as “Failure to File.” According to IRS regulations, the penalties are assessed and added to your tax bill. It should be noted that any assessed penalties are in addition to the tax originally due, as well as the interest on the past-due tax. Penalties for late filings are generally 5% of the owed bill for each month, up to five months (or, 25%). If your tax return is over 60 days late, the minimum penalty assessed is the lesser amount of either $100 or 100% of the tax owed.
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