{"id":354024,"date":"2016-04-04T10:48:06","date_gmt":"2016-04-04T15:48:06","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/tax\/tax-problems-audits\/tax-penalties-quick-reference-guide.html"},"modified":"2025-03-17T13:57:03","modified_gmt":"2025-03-17T18:57:03","slug":"tax-penalties-quick-reference-guide","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/tax\/tax-problems-audits\/tax-penalties-quick-reference-guide.html","title":{"rendered":"What Happens If You File Your Federal Taxes Late?"},"content":{"rendered":"\n
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What Happens If You File Your Federal Taxes Late?<\/h1>\n
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\n By Balrina Ahluwalia, Esq.<\/a> | Legally reviewed by Laura Temme, Esq.<\/a>\n | Last reviewed\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

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Filing your federal taxes late can lead to various consequences, including financial penalties and interest charges. The severity of these penalties largely depends on whether you owe taxes and how late you file. Filing late can also delay tax benefits like the child tax credit and complicate tax planning strategies that could lower your tax bracket.<\/p>\n\n <\/div>\n\n

When tax day is looming, it can be a stressful time, particularly if you\u2019re not quite ready to file your income tax return. You may even find yourself wondering what happens if you file late. If that\u2019s the case, it\u2019s important to make informed decisions. Filing taxes late can lead to financial penalties, interest charges, and other complications.<\/p>\r\n

The specific consequences for filing late, however, aren\u2019t always grave. They will depend heavily on your circumstances. As such, it\u2019s often a good idea to obtain tax advice from someone who can help you understand your options.<\/p>\r\n

In this article, we\u2019ll explore some fundamental principles you\u2019ll want to keep in mind if you\u2019re considering filing your federal taxes<\/a> late.<\/p>\r\n

Penalties<\/h2>\r\n

If you\u2019re likely to owe taxes, it\u2019s usually a good idea to file your tax return on time, even if you can’t pay the tax due. The Internal Revenue Service (IRS)<\/a> penalties for missing the tax filing deadline are typically worse than those for not paying.<\/p>\r\n

The U.S. tax code includes more than 150 penalties that cover almost any unpaid tax situation. Yet, two main types of IRS penalties<\/a> generally arise in these situations.<\/p>\r\n

Failure-To-File Penalty<\/h3>\r\n

This is a late filing penalty<\/a> the IRS charges for not submitting your tax return by the deadline. It’s usually 5% of the unpaid taxes for each month or part of a month that your return is late. This can add up quickly, but the maximum penalty is 25% of your unpaid taxes.<\/p>\r\n

If you file more than 60 days late, the minimum penalty is either $435 or 100% of the unpaid tax, whichever is less.<\/p>\r\n

Failure-To-Pay Penalty<\/h3>\r\n

The failure-to-pay penalty<\/a> is a late payment penalty. It applies if you don’t pay your taxes by the due date. It’s typically 0.5% of your unpaid taxes for each month or part of a month that you’re late. This penalty can also go up to 25% of your unpaid taxes.<\/p>\r\n

If both failure-to-file and failure-to-pay penalties apply, the maximum amount charged for these two penalties is 5% per month.<\/p>\r\n

In addition to these penalties, interest charges<\/a> will accrue on the total tax amount you owe. The interest rate changes every three months, but it’s usually around 3-6% per year.<\/p>\r\n

Other Consequences<\/h2>\r\n

Filing late might also mean you miss opportunities for tax planning that could have moved you into a lower tax bracket. For example, you might miss the deadline for making certain tax-deductible contributions that could have lowered your tax rates.<\/p>\r\n

It could also delay your ability to claim certain benefits or credits that depend on your tax information. For instance, late filers may experience delays in receiving the child tax credit<\/a>, which is typically claimed when you file your tax return.<\/p>\r\n

Tax Evasion<\/h3>\r\n

In extreme cases, failure to file taxes altogether can lead to criminal charges<\/a>. But, this is rare. It usually happens only if the IRS believes the person or entity is intentionally evading taxes.<\/p>\r\n

Extensions<\/h2>\r\n

If you know that you need to file late, you can file for a tax extension using a specific IRS form<\/a>. There are several ways to submit this form, including by e-file and paper. However, an extension of time to file isn\u2019t an extension to pay. You still need to estimate and pay the amount due by the original due date to avoid penalties and interest.<\/p>\r\n

But once the form is filed and you\u2019ve made the estimated tax payment, you\u2019re automatically approved for an extension<\/a>.<\/p>\r\n

IRS Payment Options<\/h2>\r\n

The IRS also has options for taxpayers who are unable to pay their taxes in full, even if they have filed their taxes late. Two of the most common are offers in compromise (OICs) and installment agreements<\/a>.<\/p>\r\n

Offers in Compromise<\/h3>\r\n

An offer in compromise<\/a> allows you to settle your tax debt for less than the full amount you owe. This may be an option if you can\u2019t pay your full tax liability or if doing so would create a financial hardship. Obtaining an OIC is a complicated process, but it\u2019s often a desirable course of action for many taxpayers.<\/p>\r\n

Installment Agreements<\/h3>\r\n

An installment agreement is basically an IRS payment plan<\/a> that allows you to pay your tax debt over time. If you can\u2019t pay your taxes in full when they are due, you can apply for an installment agreement to make monthly payments. If you go this route, penalties and interest will continue to accrue on the unpaid balance, but the penalty rate for failing to pay is reduced.<\/p>\r\n

Penalty Relief<\/h2>\r\n

In some cases, you might qualify for penalty relief. The IRS offers a few different kinds.<\/p>\r\n

Reasonable Cause<\/h3>\r\n

If you have a good reason for filing late, the IRS may grant you penalty relief. The situation must have been serious and prevented you from filing on time.<\/p>\r\n

For example, you were hospitalized or experienced a natural disaster. You\u2019ll need to show reasonable cause for filing late, but a tax attorney can help you with this.<\/p>\r\n

First-Time Penalty Abatement<\/h3>\r\n

If you have a history of filing and paying on time, you might qualify for penalty relief under the first-time penalty abatement policy<\/a>. This penalty relief requires you to have a clean compliance history for the past three years and have filed all required tax returns or extensions.<\/p>\r\n

There are also opportunities for penalty relief if you received incorrect written advice from the IRS or were otherwise granted an administrative waiver.<\/p>\r\n

Refunds<\/h2>\r\n

If you’re expecting a tax refund, you probably won’t face any penalties for filing late<\/a>. However, you’ll have to wait longer to get your money back.<\/p>\r\n

The IRS generally has three years to issue a refund. This means you\u2019ll forfeit the refund if you don\u2019t file your federal income tax return within this period. So, it’s in your best interest to file as soon as possible.<\/p>\r\n

Back Taxes<\/h3>\r\n

If you have unpaid taxes from a previous tax year, the IRS can apply your current year\u2019s refund to the balance due on those unpaid taxes. This means you might not get your refund until you settle your past tax debts.<\/p>\r\n

Unpaid Taxes<\/h2>\r\n

Whether you\u2019re filing or paying late, or both, you\u2019ll want to stay on top of any unpaid taxes. If you don\u2019t, the IRS may take various actions to collect them<\/a>. These can include:<\/p>\r\n