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Using TurboTax does not automatically mean you owe an IRS penalty. The headline figure refers to a general failure-to-file penalty: 5% of unpaid tax for each month or part of a month a required return is late, usually capped at 25%. It is not 5% of your income. The key questions are whether you were required to file Form 1040-NR, whether the return was actually filed late, and whether tax remained unpaid.
What the IRS’s 5% monthly penalty applies to
The failure-to-file penalty generally applies when a required federal tax return is filed after its due date. The IRS calculates it on tax that remained unpaid after relevant timely payments and allowed refundable credits—not on gross income. It accrues at 5% for each month or part of a month the return is late, up to 25%. IRS: Failure to File Penalty
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A separate failure-to-pay penalty can also apply when tax is not paid on time. For a month in which both penalties apply, the failure-to-file penalty is reduced by the failure-to-pay amount. The penalties therefore should not be described as two unreduced monthly percentages simply added together for the same month. Interest may also apply.
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For certain individual returns filed more than 60 days late, a minimum failure-to-file penalty may apply. The IRS lists $525 for returns due after December 31, 2025, subject to the statutory comparison with 100% of unpaid tax. This is a tax-year-sensitive amount; check the IRS rule for the return year at issue rather than applying it to older returns.
#1 Best Overall
- TurboTax Desktop Edition is download software which you install on your computer for use
- Requires Windows 11 or macOS Sonoma or later (Windows 10 not supported)
- Recommended if you own a home, have charitable donations, high medical expenses and need to file both Federal & State Tax Returns
- Includes 5 Federal e-files and 1 State via download. State e-file sold separately. Get U.S.-based technical support (hours may vary).
- Live Tax Advice: Connect with a tax expert and get one-on-one advice and answers as you prepare your return (fee applies)
Reasonable cause
The IRS says the failure-to-file penalty does not apply if a taxpayer can show the failure was due to reasonable cause. Whether particular circumstances qualify is fact-specific; the exception is not automatic.
First determine whether you were a nonresident for tax purposes and had to file
Citizenship or a visa label alone does not settle U.S. federal tax residency. The relevant classification depends on the applicable IRS rules and a person’s facts. Some people who are not U.S. citizens are resident aliens for tax purposes; some nonresident aliens have no filing requirement for a particular year.
Rank #2
- TurboTax Desktop Edition is download software which you install on your computer for use
- Requires Windows 11 or macOS Sonoma or later (Windows 10 not supported)
- Recommended if you are self-employed, an independent contractor, freelancer, small business owner, sole proprietor, or consultant
- Includes 5 Federal e-files and 1 State via download. State e-file sold separately. Get U.S.-based technical support (hours may vary)
- Live Tax Advice: Connect with a tax expert and get one-on-one advice and answers as you prepare your return (fee applies)
When a nonresident alien is required to file, the IRS generally requires Form 1040-NR rather than Form 1040. Filing situations include engaging in a U.S. trade or business, having certain U.S.-source income for which tax was not fully satisfied through withholding, and filing to claim a refund of excess withholding or certain deductions or credits. Review IRS Publication 519, U.S. Tax Guide for Aliens and the instructions for the relevant return year to determine how the rules apply.
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TurboTax does not prepare Form 1040-NR
Intuit’s TurboTax Help page, updated March 25, 2026, says TurboTax does not support IRS Form 1040-NR. It also says Intuit partnered with Sprintax to offer federal and state tax preparation for international students, scholars, and nonresident foreign professionals. Intuit: Does TurboTax handle Form 1040-NR for nonresident aliens?
Rank #3
- Recommended if you sold stock, bonds or mutual funds, sold employee stock, own rental property or are a trust beneficiary
- Includes 5 Federal e-files and 1 State via download. State e-file sold separately. Get U.S.-based technical support (hours may vary).
- NEW. Live Tax Advice: Connect with a tax expert and get one-on-one advice and answers as you prepare your return (fee applies)
- Get your taxes done right and keep more of your investment and rental property income
- Step-by-step guidance on stocks, bonds, ESPPs and other investment income
That limitation is important, but it does not prove that every person who used TurboTax filed incorrectly. The penalty depends on the filing obligation, what was filed, the deadline, whether tax was unpaid, and any applicable exception. A software mismatch by itself does not establish a filing liability or a penalty.
Check the due date for the tax year involved
For calendar-year 2025 returns, the general due dates in the 2025 Instructions for Form 1040-NR differ according to the filer’s income and work circumstances:
Rank #4
- TurboTax Desktop Edition is download software which you install on your computer for use
- Requires Windows 11 or macOS Sonoma or later (Windows 10 not supported)
- Recommended if you sold stock, bonds or mutual funds, sold employee stock, own rental property or are a trust beneficiary.
- Includes 5 Federal e-files and 1 State via download. State e-file sold separately. Get U.S.-based technical support (hours may vary).
- Live Tax Advice: Connect with a tax expert and get one-on-one advice and answers as you prepare your return (fee applies)
| General situation | General due date for a 2025 return |
|---|---|
| Employee who received wages subject to U.S. income tax withholding | April 15, 2026 |
| No wages as an employee subject to U.S. income tax withholding | June 15, 2026 |
These are general dates for the 2025 tax year, not universal deadlines. Special circumstances, extensions, and weekends or holidays can affect a deadline. For another tax year, use that year’s instructions.
What to do if you used TurboTax
- Establish your tax status and filing duty. Use the IRS rules for the tax year to determine whether you were a nonresident alien and whether your income, U.S. activities, withholding, or refund claim required a return.
- Find out what was actually filed. Check your saved return and filing records to identify the form submitted, the tax year, and the date it was filed. A TurboTax-prepared Form 1040 is not Form 1040-NR.
- Work out whether tax remains unpaid. The headline 5% rate is tied to unpaid tax, so gather relevant payment and withholding records, as well as any IRS notices. Do not estimate a penalty from income alone.
- Use a preparation route suited to your circumstances. Intuit names Sprintax for international students, scholars, and nonresident foreign professionals. Sprintax says its software does not support dual-status taxpayer returns, so a person whose residency status changed during the year should not assume it is suitable. Sprintax FAQ
- Get help for an already-filed return or an unusual case. If you filed the wrong form, have dual-status or treaty questions, or received an IRS notice, consult current IRS instructions or a tax professional experienced with nonresident returns before deciding how to correct the filing.
The available facts cannot determine an individual’s filing obligation, penalty, or correction method. Those depend on the tax year and the person’s actual status, income, filing history, payments, and circumstances.
Quick Recap
Best Value
- TurboTax Desktop Edition is download software which you install on your computer for use
- Requires Windows 11 or macOS Sonoma or later (Windows 10 not supported)
- Recommended if you have a partnership, own an S or C Corp, Multi-Member LLC, manage a trust or estate, or need to file a separate tax return for your business
- Includes 5 Federal e-files. Business State forms sold separately via download. Get U.S.-based technical support (hours may vary).
- Prepare and file your business or trust taxes with confidence
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