Filing Penalties

• Most years, the IRS sets a personal income tax filing deadline of April 15. Always check the IRS website or with an accountant for any variances. You need to file the appropriate version of a Form 1040 and any corresponding attachments by that date or you'll face penalties of 5 percent per month until you file or the total reaches 25 percent of your total tax due. If you don't owe taxes, then you'll simply wait longer for your refund.
  
  

Other Penalties

• If you don't pay at least 90 percent of your taxes due by the April deadline, you face additional penalties of one-half of a percent per month in addition to a 3 percent federal short-term interest rate compounded daily. This can accrue until your total amount owed reaches 20 percent of your total tax burden. The IRS recommends using a credit card or finding other payment sources rather than accrue interest at the federal rate.
  
  

Extensions

• The best way out of a late filing penalty is to file for an extension. Although you're supposed to have a legitimate reason for this, the IRS generally approves extensions without hassle. Get your extension paperwork mailed to the IRS by the tax filing deadline and you can have until June to prepare and file your tax return. In fact, if you're even worried about making the deadline, filing an extension is like free insurance. Send in this no-fee request and you can file a day late without worries about late filing penalties.
  
  

Relief and Abatement

• The IRS takes requests for relief and abatement of penalties. Although there's no guarantee you'll receive approval, sending in a Form 843 along with your late tax filing gives you a chance at escaping penalties. You're have a decent chance of success if your filing is only one day late. Of course, if you have no taxes due, then the late filing penalty will not apply. Additionally, if you file a day late, but include payment, you'll only receive penalties for the one day.