tax tips — April 20, 2017

I Missed the Tax Filing Deadline – Now What?

by Susannah McQuitty

A woman filing her taxes late at a café

Updated for 2021

Missing the Tax Day deadline can be panic-inducing, but hold the phone – not filing your taxes by May 17 doesn’t mean you’re going to be hauled off to answer to the IRS. It does mean you’ll want to file as soon after the deadline as possible.

There are no late filing penalties if you’re expecting a refund, but you also won’t get your refund until after you file your taxes. If you owe taxes, on the other hand, you need to know about the failure-to-file penalty and the failure-to-pay penalty.

Failure to file

Even if you know you can’t afford to pay your taxes, you should definitely go ahead and file. The penalty for not filing your tax return can be 10 times more than the penalty for not actually paying the taxes you owe.
Here’s how the failure-to-file penalty is calculated: Let’s say you owe a hypothetical $1,000 in taxes. For each month, the penalty will add an additional 5% of your unpaid taxes to your bill, so after one month you’ll owe $1,050 (since $50 is 5% of $1,000), after two months, $1,100, and so on.

Now, the penalty won’t exceed 25% of your unpaid taxes unless you wait 60 days or more after the due date to file. At that point, the minimum penalty is either $135 or 100% of the unpaid tax, whichever is smaller.

A laptop ready to file taxes after the deadline

Failure to pay

By contrast, the failure-to-pay penalty is generally 0.5% (yes, that’s half a percent) per month on your unpaid taxes, and it can build up to as much as 25% of your unpaid taxes. If the 5% failure-to-file penalty and the 0.5% percent failure-to-pay penalties both apply in any month, the maximum penalty that you’ll pay for the combination is 5%.

If you requested an extension of time to file by the due date, and paid at least 90% of the tax you owe, you may not face a failure-to-pay penalty. You will have to pay the remaining balance by the extension due date, though, and interest will apply on the balance.

What if I can’t pay my taxes?

First, you absolutely should still file your return. The penalties for not filing are much higher than not paying, and all it takes to file your taxes are your documents, time, and the right e-filing service.
Second, IRS-suggested payment options include getting a loan or paying the tax due by credit card. Many taxpayers can opt to set up a payment plan with the IRS using their Online Payment Agreement tool. For more information on late payment options, see our blog post on what to do if you can’t pay your taxes.

If you haven’t e-filed your return yet and you owe tax due, the best advice is to file and pay what you can now.


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