Complete Guide
Failure to File vs. Failure to Pay Penalties
Did you file late? The penalty is 10x higher than paying late. Learn the difference and how to abate both.
Key Takeaways
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penalties eligible for first-time abatement
The 10x Difference
Many taxpayers don't realize that Filing Late is much worse than Paying Late.
- Failure to Pay: 0.5% per month.
- Failure to File: 5.0% per month.
The penalty for not filing is 10 times higher. Even if you cannot pay a single dollar of your tax bill, you should *always* file on time to avoid the crushing 5% monthly penalty.
Combined Penalties
- If you both failed to file AND failed to pay, the penalties are combined but capped.
- Max Failure to File: 25%
- Max Failure to Pay: 25%
- Combined Max: 47.5% (approx)
Fortunately, First Time Abate (FTA) can often wipe out BOTH penalties for a single tax year.
Frequently Asked Questions
Can I abate interest?
Generally, no. Interest is statutory and rarely abated. However, if the penalty is abated, the interest *associated with that penalty* is also removed.
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