Is It Too Late to File Your 2023 Taxes?

Missing the annual tax deadline is a common experience. This guide explains your obligations and options for filing your 2023 taxes late, including understanding key dates, potential financial consequences, and the procedures for submitting your return and handling any amount you may owe.

Key 2023 Tax Filing Deadlines

For most taxpayers, the deadline to file 2023 federal income tax returns was April 15, 2024. By filing Form 4868, you could request an extension, which pushed the filing deadline to October 15, 2024.

It is important to recognize that an extension provides more time to file, not more time to pay. Any tax liability for the 2023 tax year was still due on the April 15, 2024, deadline. Therefore, if you did not pay an estimated amount owed by that date, penalties and interest may have started to accumulate, even with a filing extension.

Penalties and Refunds for Late Filing

The consequences of filing late depend on whether you are owed a refund or have a tax liability. If you are due a refund from the IRS, there is no penalty for filing your 2023 tax return after the deadline. However, you must file the return within three years of the original due date to claim your money. After that three-year window closes, the U.S. Treasury keeps any unclaimed refund.

For those who owe taxes, the IRS imposes two separate penalties. The Failure-to-File penalty is 5% of the unpaid taxes for each month or part of a month that a tax return is late, but it does not exceed 25% of your unpaid taxes. If a return is filed more than 60 days after the due date, the minimum penalty is the lesser of $485 or 100% of the tax owed.

A separate Failure-to-Pay penalty applies for not paying the taxes you owe by the deadline. This penalty is 0.5% of the unpaid taxes for each month the taxes remain unpaid, also capped at 25%. If both penalties apply in the same month, the Failure-to-File penalty is reduced by the amount of the Failure-to-Pay penalty, resulting in a combined maximum penalty of 5% per month. Interest also accrues on the underpayment and can be applied to the penalties.

Gathering Your Documents for a Late Filing

Before you complete an overdue 2023 tax return, you must collect the necessary information. This starts with personal details like Social Security numbers for yourself, your spouse, and any dependents. You will also need your bank account and routing numbers to facilitate a direct deposit refund or a direct debit payment.

Next, gather all your income documents, including the Form W-2 from each employer. You will also need all Forms 1099, which report other types of income such as:

• Freelance work (Form 1099-NEC)
• Miscellaneous income (Form 1099-MISC)
• Interest earned (Form 1099-INT)
• Dividends (Form 1099-DIV)

If you are missing any of these forms, first contact the employer or financial institution that issued it. If that is not successful, you can use the “Get Transcript” tool on the IRS website.

Finally, collect any records related to potential tax deductions or credits. This can include receipts for charitable contributions, medical expenses, and records of property taxes or mortgage interest paid, often found on Form 1098.

Submitting Your Overdue 2023 Tax Return

Once your tax forms are complete, you have two methods for submission: electronic or mail. While the IRS Free File program may no longer be available for a 2023 return after the October deadline, many commercial tax software companies continue to support the e-filing of prior-year returns. Using tax software is a straightforward way to ensure your return is transmitted securely and you receive confirmation of its acceptance.

Alternatively, you can file a paper return by printing, signing, and mailing your completed tax forms to the IRS. It is important to use the correct mailing address, as it varies depending on the state you live in and whether you are including a payment. The IRS website provides a dedicated page where you can find the precise address for the form you are filing, such as Form 1040.

Options for an Unpaid Tax Bill

If you cannot afford to pay the full amount you owe, it is still important to file the return. Separating the act of filing from paying stops the Failure-to-File penalty from growing. Once the return is filed, the IRS provides several avenues for managing the tax debt.

The IRS offers a short-term payment plan, allowing up to 180 additional days to pay the full balance, though this option may accrue penalties and interest. If you need more time, you can apply for a long-term installment agreement, which allows you to make monthly payments for up to 72 months. This option is generally available to taxpayers who owe a combined total of under $50,000, consisting of tax, penalties, and interest.

In situations of financial hardship, an Offer in Compromise (OIC) may be a possibility. An OIC allows certain taxpayers to resolve their tax liability with the IRS for a lower amount than what they originally owed. The IRS has strict eligibility requirements for this program, so for most people, establishing a payment plan is the most direct way to resolve the debt.