(CNN Money) — Your federal income tax return and any remaining money you owe Uncle Sam for 2017 are due today.
But if you’re still not ready to do the deed, at least keep the following in mind:
If you miss the filing deadline, you could be hit with penalties and interest if you still owe money to the IRS.
For those who are owed a refund, however, there is no penalty for filing late. But you better be pretty sure about that refund because the punitive charges can really add up if you’re wrong.
The late filing penalty amounts to 5% of your unpaid tax every month or part of a month that it goes unpaid. That charge will accrue for up to 5 months, capping the penalty at 25% of the unpaid amount.
If you’re more than 60 days late, you’ll be subject to a minimum charge of $205 or 100% of the unpaid tax, whichever is less. That minimum is meaningless, however, if the 5% per month you’ve been charged adds up to more than $205.
On top of that, you may also have to pay a late payment penalty, which amounts to 0.5% a month on your unpaid taxes plus interest. The penalty and interest will apply for every month or part of a month that you have an outstanding bill.
The filing deadline this year is April 17, 2018. If you file for an automatic 6-month extension, your filing deadline will be October 15.
But remember, an automatic extension to file is generally not an extension to pay. You must have already paid least 90% of what you owe for tax year 2017 by April 17 to avoid a late payment penalty.
Ways to minimize penalties
To make sure you’re not hit with big penalties, your first priority should be to avoid the late-filing fee.
So even if you can’t pay what you owe, file a return anyway. And if you can’t get your paperwork together to file by April 17, file for an automatic extension.
If you file for an extension, you may avoid a late payment penalty if you’ve already paid 90% of what you owed for 2017 and you pay the remaining 10% by your extended filing deadline.
And if you are going to be late in paying what you owe, at least try to pay some of it when you file, so the interest will apply to a smaller balance.
Lastly, if you can show “reasonable cause” for not filing or paying on time, the IRS will not apply penalties. But the agency doesn’t indicate what constitutes “reasonable cause.” That’s determined on a case-by-case basis, an IRS spokesperson said.
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