Late Filing Penalty

[Christian]

A client who always files by extension has miscalculated his 2013 income. The upshot is he has paid and withheld more tax than was owed on his 2012 return but owes about $1300 on 2013. I am wondering what the late filing penalty might run. My experience has been that if full payment is made with the return the Service not infrequently simply ignores the penalty.

[Max W]

If he filed an extension for 2013, there is no late filing penalty as long as the return is filed by Oct 15.

Late filing penalties are 5%/month to a max of 25%, so worst case for your clients would be about $325 plus late payment penalty & interest, about $37, if it is 6 months late.

[Jack from Ohio]

My experience has been that if full payment is made with the return the Service not infrequently simply ignores the penalty.

Not in the last 3-4 years. They are very stingy about abating penalties. He cannot get out of late payment, or underpayment penalty and interest. He should file by Oct. 15, 2014 to prevent late filing penalties.

[JohnH]

I couldn't make out from the original post whether the client has filed an extension for 2013.  If so, then if he files by Oct 15 he will not owe any FTF penalty (5% per month), for the underpayment, no matter how much the underpayment might be.  He will owe a FTP penalty of 1/2 of 1% per month plus interest at about 4% APR on the unpaid balance. So with the extension in place I'd estimate that he will owe about $100 in FTP penalty and interest combined.