In a 1789 letter to Jean-Baptiste Leroy, Ben Franklin wrote, “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”
It’s interesting that while the Constitution has changed only minimally since 1787, the tax code changes all the time.
Now that we’re well and through this year’s April 15 tax deadline, hopefully you are one of the 113 million who filed your return on time and paid any taxes owed. If not, you at least should have filed for a tax extension for your 2014 federal income tax return. Bear in mind that, even if you filed for an extension, any amount you may owe was still due on April 15. Otherwise, the very next day the clock started ticking and penalties and interest will accrue on any outstanding amount you owe.
- Late filing penalty: Typically five percent of the tax bill for each month (or part of a month) that the return is late, up to 25 percent of the tax bill
- Late payment penalty: Typically 0.5 percent of taxes owed for each month after April 15
- Late payment interest: The interest rate equals the federal short-term rate plus 3 percent (set quarterly)
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