Missed the Tax Day Deadline and Forgot to File an Extension? What You Need to Know
Not everyone is penalized for filing their taxes late.
If your tax return isn't filed electronically or postmarked by your tax deadline, it will automatically be marked as late.
Tax Day was April 15, 2024 for most Americans -- if you live in one of the states with automatic extensions, you've got a little more time, but if not, you're out of luck. If you didn't file an extension or complete your tax return by midnight on Monday, you're now delinquent.
For taxpayers who are certain they'll receive a refund on their 2023 tax return, the only harm in missing the tax deadline is letting the IRS hold on to your money a bit longer. However, if you owe taxes, you don't want to wait -- penalties and interest can pile up quickly.
Read on to learn more about what happens to late tax returns, including information on penalties, interest and payment plans. For more, here's the best software for filing your tax return, and learn how to track your refund to your bank account after you do.
What if I missed the deadline and I'm expecting a tax refund?
If you're expecting money back from the IRS from your 2023 tax return, there are no penalties for filing late. In fact, you have three years to file your 2023 tax return before the IRS turns your tax refund over to the Treasury and your money is gone forever.
Your tax refund might be delayed by filing late, but you should still expect to receive your money in four to six weeks.
You could be making good use of the money the IRS owes you, and the longer you wait to file your taxes, the more you lose out. Whether you use your tax refund to pay down credit card debt, start an emergency fund, make investments or even just treat yourself to a nice dinner or vacation (depending on your refund amount), you want your money as soon as possible. Letting the IRS keep your tax refund longer only deprives you of possible interest and spending power.
What if I missed the deadline and I owe money on my taxes?
If you missed the tax deadline, didn't file an extension and you owe taxes, there's a good chance you will incur both late filing penalties and late payment penalties. You'll also have to pay interest on the money that you owe until it's completely paid.
What are the fees and penalties for filing taxes late?
There are two basic penalties that the IRS charges for filing taxes late when you owe money: a failure-to-file penalty and a failure-to-pay penalty. On top of that, you'll also pay interest on the amount you owe.
The failure-to-file penalty hurts the most. It's generally 5% of the amount you owe for each month or part of a month that your return is late, with a maximum penalty of 25%. If your return is more than 60 days late, the minimum penalty is $435 or the balance of your taxes due, if less than that.
The failure-to-pay penalty will also cost you money, but not nearly as much -- a big reason to file an extension on time even if you can't pay anything. This penalty is usually calculated at 0.5% of any taxes owed that aren't paid by the deadline. The IRS again charges the penalty for each month or part of a month that your payment is late, with a maximum 25% penalty total.
The IRS also charges interest on late taxes. Determined by adding 3% to the short-term federal interest rate, the IRS interest rate is currently 7%. That rate is adjusted quarterly, and interest is compounded daily.
Can I file an extension past the tax deadline?
Unfortunately, no. Tax extensions provide taxpayers six additional months to complete their tax returns, but they must be filed by the tax deadline. Taxpayers filing extensions must also include the estimated amount of money that they owe using IRS Form 1040-ES. Online tax software can also quickly calculate your estimated taxes.
If you wanted to file a tax extension with the IRS, you needed to do it by the April 15 deadline. Extensions needed to be filed electronically or postmarked (if using IRS Form 4868 on paper) by midnight April 15, unless you're in one of the areas given automatic tax extensions due to natural disasters. In that case, you can file a tax extension up until your new tax deadline. Regardless of your tax deadline, any tax extension you file will only prolong your deadline until Oct. 15, 2024.
What if I filed an extension on time?
If you filed a tax extension by the April 15 deadline, you get an extra six months to file your 2023 tax return. As long as you paid an estimated amount that's close to what you owe, you won't be subject to fines or penalties if you file your return and pay any remaining tax liability by Oct. 15, 2024.
If you don't pay enough money with your tax extension, you may be subject to the late payment penalty. The IRS expects your estimated payment to be at least 90% of your total tax liability. The agency may charge a 0.5% per month penalty on the amount of unpaid taxes if you paid less than that, so you should still complete your tax return and file it as soon as possible.
What if I can't afford to pay the taxes I owe?
Owing taxes that you don't have the money to pay can be incredibly stressful. However, you can take action now that will lighten both your financial and psychological burdens.
Consider an IRS payment plan. If you can pay off your tax debt within 180 days, the IRS will let you apply for a short-term payment plan that costs nothing, although you'll still accrue penalties and interest until your debt is paid off. It's easy to apply online or at a local IRS office.
If you need more than 180 days, you can apply for a long-term payment plan that costs $31 for automatic monthly bank payments via direct debit, or $130 for non-direct debit payments. Low-income taxpayers -- those with adjusted gross incomes at or below 250% of the federal poverty guidelines -- can waive the fee for the direct-debit installment plan or pay $43 for the non-direct debit plan.
You might consider other borrowing options outside of the IRS. If your tax liability isn't too high, you could use a credit card with a 0% intro APR to pay your taxes, assuming you can pay off that debt before the intro period expires. For larger tax debts, you could consider a debt-consolidation loan, though your rate may be higher than the 7% currently charged by the IRS.