What Happens If I Miss the Tax Deadline?

Failing to file your taxes on time carries consequences, but the Internal Revenue Service (IRS) has established clear procedures to resolve the situation. The best approach is to address the issue proactively rather than ignoring it, as the IRS provides several pathways to regain compliance.

Penalties and Interest for Late Filing and Payment

When a tax return is not filed by the deadline with a tax amount due, the IRS can assess two primary penalties: the Failure to File penalty and the Failure to Pay penalty. These charges can be applied simultaneously, so it is important to understand how each is calculated.

The Failure to File penalty is more severe, calculated at 5% of the unpaid taxes for each month or part of a month a return is late. This penalty begins the day after the tax due date and is capped at 25% of the outstanding tax liability.

The Failure to Pay penalty is 0.5% of the unpaid taxes for each month or part of a 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. This results in a combined maximum penalty of 5% per month.

The IRS also charges interest on underpayments and unpaid penalties from the tax due date until the balance is paid in full. The interest rate can be adjusted quarterly. For returns filed more than 60 days after the due date, a minimum Failure to File penalty applies. For 2025 returns, this penalty is the smaller of $510 or 100% of the tax owed.

The Exception If You Are Owed a Refund

Penalties for late filing and payment are tied to the amount of tax you owe. If you are due a tax refund, there is no penalty for filing your tax return after the deadline, as penalties are calculated as a percentage of unpaid tax.

This exception is not indefinite. A taxpayer must file a return to claim a refund within three years of the original tax due date. For example, to claim a 2024 tax year refund, the return must be filed by the 2028 tax deadline. If a return is not filed within this window, the right to the refund is forfeited.

Filing promptly when a refund is expected is still advisable, as delaying the filing also delays receiving your money. Furthermore, the statute of limitations for the IRS to initiate an audit does not begin until a return is filed.

How to File a Late Tax Return

For a return that is only a few months late, you can still use current-year tax software to prepare and e-file it. E-filing is the fastest way to file and provides confirmation that the IRS has received your return.

Prior-year returns require filing a paper return. The IRS maintains an online archive of past tax forms, and you must use the specific forms and instructions for the tax year you are filing. After completing the paper return, it must be mailed to the IRS service center listed in the instructions.

To complete a late return, you will need standard documentation like W-2s and 1099 forms. If you are missing any of these documents, you can request a free tax transcript from the IRS online or by mail. This transcript shows data from information returns the IRS has received under your Social Security number.

Options If You Cannot Pay Your Tax Bill

Even if you cannot immediately afford your tax bill, you should still file your return. The IRS provides several payment solutions, including a Short-Term Payment Plan, which allows up to 180 days to pay your tax debt in full and can be requested online.

For those who need more than 180 days, a Long-Term Payment Plan, or Installment Agreement, is available. This allows taxpayers to make monthly payments for up to 72 months. An installment agreement can be set up online if the total amount owed is below a certain threshold. While interest and late-payment penalties continue to accrue, the rates may be lower for those in a formal agreement.

In cases of significant financial hardship, an Offer in Compromise (OIC) may be an option. 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 criteria based on an individual’s ability to pay, income, expenses, and asset equity, and not all applications are accepted.

Requesting Penalty Relief

After filing a late return and addressing the tax liability, you may be able to have the penalties removed through penalty abatement. The most common path is the First-Time Penalty Abatement program, which is available if you have a history of compliance.

To qualify for First-Time Penalty Abatement, a taxpayer must have a clean compliance record. This means they have filed all required returns for the past three years and have not had any penalties assessed during that period. The taxpayer must also have paid, or arranged to pay, any tax due, and this relief applies to the Failure to File and Failure to Pay penalties.

Another avenue for relief is showing “Reasonable Cause.” This applies if the failure to file or pay on time was due to circumstances beyond the taxpayer’s control. Examples include a death or serious illness of the taxpayer or an immediate family member, a natural disaster that destroyed records, or receiving incorrect advice from a tax professional. A request for penalty relief can be made by phone or by submitting Form 843, Claim for Refund and Request for Abatement.