What Happens If You Don’t File Taxes by April 15th?

The established deadline for filing a federal income tax return with the Internal Revenue Service (IRS) is April 15th, though it can shift to the next business day if the 15th is on a weekend or holiday. Failing to meet this deadline can lead to a series of consequences, but there are also established procedures for managing the situation. The outcomes of a missed deadline depend on whether a taxpayer owes additional tax or is due a refund.

Penalties for Late Filing and Late Payment

When a tax return is not filed by the deadline and there is a balance due, the IRS can impose penalties. The primary penalty is for failure to file, which is calculated at 5% of the unpaid taxes for each month or part of a month that the return is late. This penalty is capped at 25% of the total tax owed.

A separate penalty exists for failing to pay the taxes owed. The failure-to-pay penalty is 0.5% of the unpaid taxes for each month or part of a month the payment is late, and it also maxes out at 25% of the unpaid tax liability. If you do not pay within 10 days of receiving an IRS notice, the rate can increase to 1% per month. When both penalties are applied in the same month, the failure-to-file penalty is reduced by the amount of the failure-to-pay penalty.

In addition to these penalties, interest is charged on any underpayment of tax, including on accrued penalties. The interest rate is determined quarterly and is calculated by adding 3% to the federal short-term rate. For instance, a taxpayer owing $5,000 who files three months late could face significant penalties plus daily compounding interest on the entire outstanding amount.

For returns filed more than 60 days after the due date, a minimum late filing penalty applies. This minimum is the lesser of $525 or 100% of the tax owed.

Requesting a Filing Extension

Taxpayers who cannot file their return by April 15th can request an automatic six-month extension, moving the filing due date to October 15th. This is an extension of time to file, not an extension of time to pay. Any tax liability is still due by the original April 15th deadline to avoid the failure-to-pay penalty and interest charges.

To request this extension, taxpayers must submit Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. The form requires an estimate of your total tax liability for the year and the total amount you have already paid.

Submitting Form 4868 can be done electronically or by mailing a paper copy. Another method for obtaining an extension is to make an electronic payment for part or all of your estimated tax due and indicate that the payment is for an extension. By paying at least 90% of your actual tax liability by the April 15 deadline when you request the extension, you can avoid the failure-to-pay penalty.

Filing Your Taxes After the Deadline

If you have missed the deadline and did not file for an extension, you should file your overdue tax return as soon as possible. Filing promptly will halt the accumulation of the failure-to-file penalty, which is the more severe of the two main penalties.

You can file a late return electronically if the IRS e-file system is still open for that tax year; otherwise, you will need to mail a paper return. When you file, you should also pay as much of the tax you owe as you can. Making a partial payment will reduce the amount of interest and failure-to-pay penalties that will accrue on the remaining balance.

After the IRS processes your late-filed return, it will send a notice detailing the total amount due, including the original tax, penalties, and interest. This notice will provide instructions on how to pay the remaining balance.

Special Circumstances for Not Filing

The consequences for not filing a tax return are different if you are owed a refund. The failure-to-file and failure-to-pay penalties are based on the amount of tax owed, so if you have no tax liability or are due a refund, these penalties do not apply. However, you have three years from the original due date of the tax return to file and claim your money, or you will forfeit the refund.

Even if you cannot afford the tax bill, you should still file your tax return on time or request an extension. Filing the return prevents the failure-to-file penalty from being charged. After you file, the IRS offers several payment options for taxpayers who are unable to pay their liability in full, such as short-term payment plans or an Offer in Compromise.