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Haven’t Filed Your Tax Return Yet? Know How It Can Affect You

U.S. tax laws are stringent when it comes to filing taxes. Non-filing of returns is a direct invitation for the IRS (Internal Revenue Service) to impose fines and penalties. However, you must know that you can get an extension for filing the tax return if something happens just before the filing deadline.

In other circumstances, you are liable for getting civil penalties. In this article, you will learn about how the IRS imposes tax penalties on the failure of filing of tax returns.

Form 1040 Tax Penalties for Not Filing Tax Returns

Whether you are a freelancer, independent contractor, or a company employee, you have to file form 1040 with all the essential details. It helps in knowing how much of your income is taxable after deducting all the redemptions, tax credits, and easy handling even complicated tax situations.

However, if your net earnings are $400 or more, you need to file a tax return.

Failure-to-File Tax Return Penalty

There are different kinds of tax penalties. The first one is Failure-to-file a tax return. As the name suggests, if you fail to file your tax return before the due date, i.e., 15 April every year, you are exposed to the risk of penalty. This penalty amounts to 5% of the value of unpaid tax per month to a total of 25%.

Although, if you do not have any previous unpaid tax, you are not entitled to failure-to-file tax. Along with that, you can also file for an extended period before the due date to get more time for filing returns.

Failure-to-Pay Tax Return Penalty

It is the most common tax penalty that you should know about. If you do not pay your tax after filing your return, you are liable to pay a fine of 0.5% of the unpaid tax value, which gradually increases with time on non-payment of the outstanding tax. The maximum amount of the penalty is up to 25%, just like the failure-to-file tax penalty.

Estimated Tax Penalty

If you are accountable for the payment of $1,000 or more while filing your tax return, you come in the estimated tax category. The experts at Silvertaxgroup.com clarified that you could lower your penalty by annualizing your total income earned for the whole year. To avail this benefit, you have to fill the form 2210, underpayment of estimated tax by individuals, estates, and trusts.

Tax Fraud Penalty

Tax fraud is a grave crime, and the IRS has a stringent policy against it. They can enforce a 75% penalty on the non paid portion. However, the Internal Revenue Service understands the fact that tax laws can get confusing. That is why they will first investigate the whole case to know if the fraud was intentional or not. In the circumstances where a person gets proven for intentional fraud, he/she is subjected to imprisonment, fine or both.


Considering how strict the IRS tax law is, you must file your tax on time and save yourself from penalties and fines.

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