Can You File Taxes After April 18? What to Know About Late Filing

Filing taxes is a responsibility for individuals and businesses, with the IRS setting deadlines to ensure compliance. Missing the April 18 deadline can lead to significant consequences, so understanding options for those unable to file on time is essential.

This article explores considerations for late tax filers, including penalties, extension possibilities, and strategies for managing unpaid balances.

Late Filing Penalties

The IRS imposes a failure-to-file penalty, typically 5% of unpaid taxes for each month or part of a month that a tax return is late, up to a maximum of 25%. For instance, if you owe $1,000 and file three months late, the penalty could total $150. This is separate from the failure-to-pay penalty, which is generally 0.5% of unpaid taxes per month. Relief may be available for those with reasonable cause, such as a natural disaster or serious illness, but proper documentation is required.

Possible Extension Options

Taxpayers unable to meet the April 18 deadline can file for an automatic six-month extension using Form 4868, moving the filing deadline to October 15. However, this extension applies only to filing, not to paying taxes owed. To avoid penalties and interest, taxpayers should estimate their liability and pay the expected amount by April 18. Form 4868 can be submitted electronically through the IRS e-file system or with tax software. Additionally, making a tax payment through IRS Direct Pay or EFTPS can secure an extension without separately filing Form 4868.

Filing After April 18

After the April 18 deadline, interest begins accruing on unpaid balances. The IRS sets the interest rate quarterly, and it compounds daily. For the 2024 tax year, the underpayment interest rate is 5%. A history of late filing increases the risk of audits, underscoring the importance of maintaining accurate records. Taxpayers should also be aware of IRS Notice CP59, which alerts them to missing returns.

Interest on Unpaid Balances

Interest on unpaid taxes compounds daily, potentially increasing total liability. The current underpayment interest rate is 5%, though it may change quarterly, requiring taxpayers to stay informed. Businesses must account for these charges in their financial statements, adhering to standards like GAAP or IFRS.

Payment Arrangements

For those unable to pay their full tax liability immediately, the IRS offers payment plans. The Installment Agreement allows monthly payments for individuals with tax liabilities of $50,000 or less and businesses with $25,000 or less. For larger debts, taxpayers may qualify for a Partial Payment Installment Agreement (PPIA), which lets them pay less than the total amount owed if full payment would cause undue financial hardship. Both options allow taxpayers to manage their obligations but do not stop interest and penalties from accruing, so paying off balances quickly remains advantageous.

Reinstating Compliance

To reinstate compliance, taxpayers must resolve past-due obligations and ensure future filings and payments are on time. Filing all outstanding tax returns is a prerequisite for requesting installment agreements or other relief options. Taxpayers should also review and update Form W-4 for employees or use IRS Form 1040-ES for self-employed individuals to ensure accurate withholding or estimated tax payments throughout the year.