Missed the tax-filing deadline? Can’t pay the money you owe? Here’s what to know
Did you miss the April 18 deadline to file your taxes?
Here’s what to do now to avoid or minimize penalties, and answers to other tax questions you might have.
What happens if I missed the deadline to file my taxes?
If you owe taxes, a delay in filing on time can result in penalty and interest charges that could increase your tax bill by up to 25%. The Internal Revenue Service will send you a notice or letter if you owe a penalty.
“The Failure to File Penalty applies if you don’t file your tax return by the due date,” according to the IRS. “The penalty you must pay is a percentage of the taxes you didn’t pay on time.”
The penalty for not filing on time is 5% of the unpaid taxes for each month it’s late, plus interest. Late tax payment penalties will start on Tax Day and accrue until the taxes due are paid. So if you missed the deadline, it’s important to file your return as soon as possible to avoid high penalties. You can attach a statement to your return requesting penalty relief due to reasonable cause such as death, illness, natural disaster or loss of records, or if you usually file and pay on time.
If your return is over 60 days late, the minimum penalty is $435 or 100% of the tax required to be shown on the return, whichever is less.
What if I can’t afford to pay my taxes on time?
If you can’t pay your taxes by the deadline, you might get hit with a Failure to Pay Penalty, calculated by how long your overdue taxes remain unpaid.
“The Failure to Pay Penalty applies if you don’t pay the tax you report on your tax return by the due date or approved extended due date,” according to the IRS. “The penalty you must pay is a percentage of the taxes you didn’t pay.”
The Failure to Pay Penalty is 0.5% of the unpaid taxes for each month the tax remains unpaid, capped at 25% of your unpaid taxes.
You may qualify for an online payment plan that allows you to pay off your taxes over time.
Those payment plans include:
- Long-term payment plan (installment agreement): You owe $50,000 or less in combined tax, penalties and interest, and filed all required returns.
- Short-term payment plan: You owe less than $100,000 in combined tax, penalties and interest.
Is there a penalty for refunds?
There is no penalty for late filing of a tax return if you expect a federal or state tax refund. But if you wait too long, you can lose your refund. Your return must be filed within three years of the deadline.
For 2021 returns, that would be April 18, 2025. After that date, you will no longer be able to claim your 2021 refund.
“After the expiration of the three-year period, the refund statute prevents the issuance of a refund check and the application of any credits, including overpayments of estimated or withholding taxes, to other tax years that are underpaid,” according to the IRS.
After filing, check the status of your refund online.
How can I request an extension in a natural disaster?
If you’re in a FEMA disaster area, you can request an extension to file your federal taxes after the deadline. Print and mail Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. Find out where to mail your form here.
The extension will give you until Oct. 17 to file your return. Make sure to pay the tax you owe on time to avoid penalties and interest. If you can’t, sign up for a payment plan online so you can pay over time.
How can I contact the IRS for help?
IRS customer service representatives are available Monday through Friday, 7 a.m. to 7 p.m. at 800-829-1040.
This story was originally published April 19, 2022 at 4:13 PM.
