- Asked by casey-cat
- TurboTax Deluxe
- hamiltds , hamiltds
Just a little curious, why not file your 2011 and 2012 using Turbo Tax. If you are due a refund for the 2011 and don't owe taxes there shouldn't be any associated penalties and interest however if you do owe back taxes you are only making a bad situation MUCH WORST because the associated IRS penalties and interest are very steep and unforgiving. Basically there are three separate penalties all constructed to make you never want to file late again.....The penalties and interest are based on the following
Failure to File Penalty
Failure to Pay Penalty
Each is calculated differently and the worst thing is that the interest charged varies each month.
Failure to File Penalty....
The failure-to-file penalty is calculated based on the time from the deadline of your tax return (including extensions) to the date you actually filed your tax return. The penalty is 5% for each month the tax return is late, up to a total maximum penalty of 25%. The percentage is of the tax due as shown on the tax return. If your tax return is more than five months late, simply multiply your balance due by 25% to calculate your
failure to file penalty.
Failure to Pay Penalty
The failure-to-pay penalty is calculated based on the amount of tax you owe. The penalty is 0.5% for each month the tax is not paid in full. There is no maximum limit to the failure-to-pay penalty. The penalty is calculated from the original payment deadline (the original April 15th filing deadline) until the balance due is paid in full.
Interest is calculated based on how much tax you owe. Interest rates change every three months. Currently, the IRS interest rate for underpayment of tax is 4% per year. The interest is calculated for each day your balance due is not paid in full. .
Finally, as you can see this can get out of hand pretty quick so it can cost you a WHOLE LOT of money to wait. Much more than what you would pay for the Turbo Tax software. My advice to you is to do everything you can do to file right away it not worth the agony, frustration and potential loss of income.....Please don't delay filing your 2011 taxes any longer than you have too
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