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Filing Taxes Late FAQ

Filing your federal income tax return every year can be stressful and time-consuming. This often makes taxpayers wonder what happens if they don't file a return. Here is a list of answers to frequently asked questions (FAQ) about why you must complete your tax forms and file your returns each year and what steps the Internal Revenue Service (IRS) could take if you don't.

When is a tax return considered late?

The IRS will consider an individual income tax return late if it is postmarked or you use tax software to e-file after midnight on tax day. Tax day is April 15, after the conclusion of a taxable year, but it can be pushed back to the next business day if tax day falls on a weekend. If you mail your federal returns, your taxes are considered filed on the day they were filed, regardless of when the IRS receives them.

In prior years, some U.S. Post Offices stayed open until midnight to postmark tax returns for filers who needed to mail returns after regular business hours, but the Post Office stopped the practice in 2023.

If you live outside the United States or Puerto Rico, you will get an automatic two-month filing extension. However, you will still need to pay interest on any payments not made by the standard April 15 filing date.

Can I get a filing extension?

All U.S. taxpayers are entitled to an automatic six-month extension of time to file if they request one by the time their return is due. That pushes their due date back to Oct. 15. You can request an extension on the IRS website, using your tax software, or by filing federal Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. If you receive an automatic two-month extension because you live outside the United States and Puerto Rico, you will only get an additional four months to file.

If you filed a return based on an extended deadline and realize that you had incorrect or incomplete tax information, you will still have three years from the date you filed to file an amended return.

Do I need to pay if I file for an extension?

A filing extension is not the same thing as a payment extension. When you request a filing extension, you will still need to make a payment of your estimated taxes due. If it turns out that your estimated payment was too low — or you made no estimated payment — the IRS will charge interest on the unpaid portion of your tax bill. If your estimated payment was more than your tax bill, the IRS will refund the difference when you file your return.

Who has to file a tax return?

Most income earners in the U.S. must file an income tax return if their gross income exceeds a specified amount during the calendar year. Nonresident U.S. citizens are also required to file a return for each tax year but can often use the foreign income taxes they pay to offset their U.S. tax obligations. The filing threshold varies depending on your filing status and age. For 2022, the filing threshold for individuals under age 65 who filed as single was $12,950. Older individuals (age 65 and older) have a higher threshold.

However, even if you aren't required to file an income tax return, it is generally a good idea to do so to ensure the IRS has your financial information. For example, you may be eligible for a refund of income withheld from your paycheck for tax purposes. Additionally, tax credits that benefit low-income taxpayers, such as the earned income tax credit, are only available to filers.

If you are self-employed, you must file a tax return to receive credits toward your Social Security retirement and disability benefits.

What if I can't afford to pay?

Some people don't want to file because they don't have enough cash to pay the tax due. If this is the case, it is a good idea to file on the due date of the return, pay what you can, and contact the IRS to work out a payment plan. That's because there are separate penalties for failing to file and failing to pay. That means a filed return with unpaid taxes will result in fewer penalties than not filing at all.

Options for taxpayers include a short-term extension, usually up to 180 days, or installment plans. It is important to stay in good standing with the IRS to reduce the late payment penalties and get the IRS to approve a request for a penalty waiver.

How much are the late filing penalties?

The penalty for filing late is 5% of the unpaid taxes for each month or part of the month the return is late. The maximum late filing penalty is 25% of the unpaid tax. The penalty for failing to pay is 1/2% for each month after the tax filing due date. There is also a minimum late-filing penalty if your return is filed more than 60 days after the due date.

What happens if I don't file?

If you don't file your taxes, the IRS may do it for you. The IRS can file a "substitute for return" based on your reported income. The substitute return does not take into account the deductions and benefits that could reduce your tax liability. The IRS can assess a tax bill and continue adding interest, late-payment, and failure-to-file penalties based on the substitute return. If the bill still isn't paid, the tax bill can go to collections, and the IRS might place a tax lien on your property.

Why didn't I get the refund I was expecting?

Your tax refund is usually paid from the amount left over after the funds withheld by your employer are applied to your tax bill. For example, if your employer withheld $5,000 and your tax bill was only $4,000, you will get a $1,000 tax refund check. Sometimes, your employer does not withhold enough to cover your tax liability, and you must make up the difference. That tax payment can be painful if you weren't expecting it, especially if the IRS applies an underpayment penalty.

If you needed to make a tax payment when you filed your last tax return and want to prevent that from happening in the future, file an adjusted Form W-4 with your employer asking for additional withholding. A little extra withholding tax taken from each paycheck can avoid needing to make a lump-sum payment in April.

Can you go to jail for not filing taxes?

Most taxpayers will not go to jail or face criminal charges for failing to file their taxes or getting behind on their bills. The IRS generally takes administrative or civil court actions to collect in those situations. You will only go to jail if you have been criminally convicted.

It is rare for the IRS to bring criminal charges unless a taxpayer committed fraud or took actions to evade the collection of taxes. For example, if you intentionally omit significant amounts of taxable income from your return, you could be found to have committed the crime of tax fraud. Penalties for tax crimes can include up to five years in prison and large fines.

What about state taxes?

Most states have a state income tax and will require you to file a return if you are a resident and have filed a federal return. If you are a part-year resident of a state with an income tax, you must file a state return based on the income you earned there. Some states will require residents to file sales tax and use tax returns in specified situations or file forms explaining that they enjoy a tax exemption.

Contact your state's department of revenue to determine your state's rules if you had an out-of-state mailing address for at least part of the tax year (P.O. boxes are generally not considered when determining residency).

Need Additional Information? Talk to a Lawyer

If you have unpaid taxes that are past due, it might be a good idea to speak with a local tax attorney about how to resolve the issue. A tax lawyer can help you negotiate with the IRS to resolve your tax situation and ensure you aren't assessed any unnecessary penalties or interest. If the taxes remain unpaid, you could face a federal tax lien and wage garnishment.

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