How much will not paying my taxes on time cost me?

If you can’t pay the taxman at the deadline, you’ll be charged approximately an annual interest rate on the unpaid balance of approximately 12%. (This is calculated by taking the interest rate set each quarter by the federal government and the monthly late payment penalty from the IRS) The state of California’s annual percentage rate on unpaid taxes is approx. 16.5 % due to the fact that California charges a hefty 5% late payment penalty for the first month. Now, these payment APR rates assume that you’ve filed on time or requested a valid extension. If you haven’t filed on time, get yourself a stiff adult beverage and read the next paragraph.

If you haven’t filed on time or been granted an extension, you’ll be charged 5% for each month or part of a month that you’re late. This is capped at 25% of the unpaid balance. So, if you haven’t filed or paid by September 15th, tack on an extra 25% to your tax bill. After that, you’re charged approx. .833% per month for the unpaid balance. So, if you can’t pay on time, make sure you’ve gotten an extension or filed your return on time. It doesn’t require a degree in astrophysics to understand that not filing and paying your taxes on time is just plain stupid.