Payment Of Taxes

[gman]

Taxpayer filed an extension and now is filing and paying taxes. Taxpayer owes about $20,000.00. and form 2210 has been filed. What kind of interest or penalty will he owe for not sending in the 20,000.00 with his extension

where could I find info on this..

[JohnH]

About 14% APR

Assuming the client owes no estimated tax penalty, you can use a figure of about 14% APR (or 1.17% per month) to guesstimate the total penalty & interest. This is comprised of interest at about 8% APR plus a Failure to Pay penalty of about 1/2 of 1% per month.

I've found this to be a pretty reliable formula, although I haven't tested it recently. I'm guesing your client owes about $1,400 in P&I at this point, assuming he pays the full amount by Oct 15. Otherwise, he's racking up about $234 per month of additional P&I, provided he files & doesn't expose himself to the 5% per month FTF penalty.

[Bird Legs]

Penalties & interest

What Tax Program do you use? There should be a form on there for this calculation.
The Interest rate is 8% for the period April 17 throught Sept. 30.