What Happens if You File Taxes After the Deadline?

Filing taxes on time is a fundamental obligation. The Internal Revenue Service (IRS) sets specific deadlines each year for submitting tax returns and paying owed taxes. Failing to adhere to these deadlines can lead to financial consequences. Understanding these outcomes helps taxpayers navigate their responsibilities.

Penalties for Late Filing and Late Payment

Missing the tax deadline can result in two penalties: the failure-to-file penalty and the failure-to-pay penalty. These distinct charges can accrue simultaneously, increasing the amount owed. Interest is also charged on underpayments, adding to the financial burden.

The failure-to-file penalty is more substantial, assessed at 5% of the unpaid taxes for each month or part of a month a return is late. This penalty is capped at 25% of your unpaid taxes. If a tax return is filed more than 60 days after its due date, including extensions, a minimum penalty applies. For 2025 returns, this minimum is the lesser of $510 or 100% of the tax shown.

The failure-to-pay penalty is 0.5% of the unpaid taxes for each month or part of a month the tax remains unpaid. This penalty is also capped at 25% of the unpaid taxes. If both penalties apply in the same month, the failure-to-file penalty is reduced by the failure-to-pay penalty for that month, resulting in a combined monthly penalty of 5%. For example, a 5% failure-to-file penalty would be reduced to 4.5%, with a 0.5% failure-to-pay penalty applied concurrently.

In addition to penalties, interest is charged on any underpaid tax from the original due date until the balance is paid in full. This interest compounds daily. The interest rate is determined quarterly and is the federal short-term rate plus three percentage points. For the first two quarters of 2025, the interest rate on underpayments for individuals is 7%.

Filing When a Refund is Due

If a tax refund is due, the consequences of filing a return late are less severe. There is no penalty for failing to file on time when the taxpayer is owed a refund. This is because penalties are designed to penalize unpaid tax liabilities.

Delaying the submission of a return when a refund is due can still lead to negative outcomes. The main impact is delayed receipt of the refund, a financial resource. There is a strict time limit for claiming a refund. Taxpayers have three years from the original due date of the return, or two years from the date the tax was paid, whichever is later, to claim their refund.

If a return is not filed within this three-year period, the taxpayer risks forfeiting the refund. The IRS will deny refunds for returns filed after this deadline. Even without a penalty, it is advisable to file as soon as possible to ensure the refund is received before the claim period expires.

Actions to Take After Missing the Deadline

Upon realizing a tax deadline has been missed, taking immediate action can help minimize penalties and interest. The first step is to file the overdue tax return promptly. Even if the full tax amount cannot be paid, filing the return promptly helps reduce the failure-to-file penalty, which is higher than the failure-to-pay penalty.

After filing the return, taxpayers should pay as much of their tax liability as they can. Paying any portion of the owed amount will reduce the base on which failure-to-pay penalties and interest are calculated. Even partial payments can help mitigate the financial burden. The IRS applies payments first to the tax owed, then to any penalties, and finally to interest.

If the full amount of tax cannot be paid immediately, several payment options are available. Taxpayers may request a short-term payment plan, allowing up to 180 additional days to pay the balance in full, though interest and penalties continue to accrue. For those facing financial difficulties, an Offer in Compromise (OIC) is an option, allowing taxpayers to resolve their tax liability for a lower amount. Entering an approved installment agreement can also reduce the failure-to-pay penalty rate from 0.5% to 0.25% per month.

Requesting Penalty Relief

Taxpayers who have incurred penalties due to late filing or payment may be eligible for penalty relief. Two avenues for relief are First-Time Penalty Abatement and Reasonable Cause. Understanding the criteria for each can help determine eligibility.

First-Time Penalty Abatement is an administrative waiver designed for taxpayers with a history of compliance. To qualify, the taxpayer must not have had penalties for the three prior tax years. All required returns must be filed, or an extension requested, and any tax due paid or arrangements made. This relief applies to failure-to-file, failure-to-pay, and failure-to-deposit penalties.

Penalties may be abated if the taxpayer can demonstrate reasonable cause for the failure to file or pay on time. This means circumstances beyond control prevented timely compliance despite ordinary care. Examples of events that can include serious illness, death in the immediate family, natural disasters, or the inability to obtain necessary records. Reliance on a tax professional’s advice alone may not always be sufficient for reasonable cause abatement for failure to file.

To request penalty relief, taxpayers should contact the IRS by phone or submit a signed written statement, with supporting documentation. The IRS evaluates such requests on a case-by-case basis, considering the facts and circumstances. Providing a clear timeline and evidence linking circumstances to non-compliance is important for a successful request.