Forgetting to Do This Could Cost You Big Time in New York

Tax season began at the end of January. So, how are your taxes coming along? I used to file dangerously close to the deadline of April 15th, but over the past few years, I've put everything together and had it all set for my tax preparer by the middle of February at the latest.

I use a tax preparer because I don't trust myself to get it right. Math isn't my strong point. Or is it just laziness? Well, it's one or the other...or both.

If you have yet to get going on your taxes, time is quickly running out. I had no idea or even thought about what would happen if I were to file my taxes past the deadline. But now, I'm curious, so, let's take a look. Keep in mind, that this is for New York State taxes.

According to the New York State Department of Taxation and Finance, penalties come in six categories -

Interest

Interest will be charged on tax that is not paid on or before the due date of a return, even if an extension of time was granted.

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Penalty for Late Filing

Filing late results in being charged 5 percent of the tax due for each month, or part of a month the return is late, up to a maximum of 25 percent. Filing late over 60 days, the minimum penalty is the lesser of $100 or the total amount due on the return

Penalty For Late Payment

The New York State Department of Taxation and Finance notes that the penalty charge is 0.5 percent of the unpaid amount for each month or part of a month it is not paid, up to a maximum of 25%

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Penalty for Incorrect Calculation of Tax

The charge is 10 percent of the difference between the tax reported and the tax actually owed according to the New York State Department of Taxation and Finance.

Penalty for Negligence, Fraudulent Returns, and Frivolous Returns

For Negligence, it is a penalty of 5 percent of the difference between the correct tax and the tax shown on your return, and 50 percent of the interest due on any underpayment resulting from negligence.

For Fraudulent Returns, the penalty is two times the difference between the correct tax and the tax shown on your return

For Frivolous Returns, it could result in a charge of up to $5,000 in addition to any other penalty.

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Penalty for Underpaying Your Estimated Tax

This applies if the 2023 withholding and estimated tax payments are not at least the smaller of 90 percent of the tax shown on a 2023 return, and 100 percent of the tax shown on a 2022 return.

For complete details on filing taxes, late filing, and penalties, visit the website of the New York State Department of Taxation and Finance. Better yet, just get them done before the 2024 deadline!