Question

Lauren had wages of $63,600 as a full-time employee in 2024. She procrastinated and did not file her tax return until July 29, 2025. She did not request an extension of time to file. Her return showed a balance due of $1,000. What amount will the IRS impose as a failure-to-file penalty?

Answer 1

Failure-to-file penalty = 5% of the unpaid tax for each month or part of a month late (capped at 25%).

Due date 4/15/25 → filed 7/29/25 = 4 months (or parts) late.
Penalty = 5% × 4 × $1,000 = 20% × $1,000 = $200.