As my colleague @Cindy4 mentioned,
-
For 2022: You owed $400 and paid $100. The penalties and interest will be calculated on the remaining $300 balance. The penalties will continue to accrue from April 2023 until you pay in full.
-
For 2023: You owe $523. Penalties and interest will be calculated on this full amount, starting from April 2024. The payment plan you set up did not stop the penalties from accruing since no payments were made.
When will the IRS Send a Penalty and Interest Notice?
Yes, the IRS calculates and sends a notice after they receive and process your mailed-in tax returns.
The IRS processes your returns, which can take several weeks or even months for paper filings.
Once processed, the IRS will compute the penalties for failure to file and failure to pay, along with the accrued interest, and send you a bill. This bill will detail the original tax due, the penalties, and the interest.
Should You Wait for the Notice to Act?
To Pay Sooner:Once you have calculated the tax you owe for 2022 and 2023, you can pay it immediately, even before the IRS sends you a bill. You can do this through the IRS website using IRS Direct Pay, or by mailing a check. Be sure to correctly specify the tax year and tax form (Form 1040) to ensure the payment is applied correctly. By paying before you get a notice, you can stop interest and penalties from accruing.
To Set Up a Payment Plan Sooner: You can set up a payment plan as soon as your returns have been processed and the balance is on your account. You can request penalty abatement more effectively once the IRS has assessed the penalty.
Can IRS Payment Plans Be Set Up After the Filing Deadline?
Yes — payment plans can be set up at any time, even after the filing deadline or for prior years. https://www.irs.gov/payments/payment-plans-installment-agreements
Do I need professional assistance for a penalty waiver?
Not necessarily — you can request it yourself. You should consider hiring a tax professional if your case is not as clear-cut. It depends on your comfort level. https://www.irs.gov/payments/penalty-relief
@user17581277999 Hope this helps!!
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
