The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) contains a provision that increases penalties for failure to file federal tax returns in a timely manner. The change applies to returns that are due beginning in 2020, including any extensions, which means these enhanced penalty amounts apply to 2019 returns.
Under prior law, the penalty for filing a late federal tax return was the lesser of 5% of the unpaid taxes or $330 for each month the tax return was late, subject to a total cap of 25% of the unpaid taxes. With Section 402 of the SECURE Act, the minimum monthly penalty increases to the lesser of 5% of the unpaid taxes or $435, subject to adjustment for inflation in future years.
Added to the SECURE Act as a revenue raiser, this provision will not be welcomed by taxpayers. Fortunately, the change impacts only the minimum monthly penalty for late filing and not the aggregate cap of 25% of any taxes due.
Interested in learning more about the SECURE Act? Download the SECURE Act eBook from the Schneider Downs Retirement Solutions team for a full overview of provisions and highlights at www.schneiderdowns.com/secure-act-ebook.
Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.
Related Posts
No related posts.