If you miss the tax deadline, several consequences can occur, especially if you owe taxes to the IRS:
- Penalties : The IRS charges a failure-to-file penalty of 5% of the unpaid tax for each month (or part of a month) your return is late, up to a maximum of 25% of the tax owed. Additionally, there is a failure-to-pay penalty of 0.5% per month on unpaid taxes, which can increase to 1% after IRS final notices, also capped at 25% total
- Interest : Interest accrues daily on any unpaid tax balance from the original due date until the tax is paid in full. The interest rate is set quarterly; for example, it is 7% for the quarter starting April 1, 2025
- Filing after the deadline : Even if you miss the deadline, you should file your return as soon as possible to minimize penalties and interest. If you are due a refund, there is generally no penalty for filing late, but you must file within three years to claim your refund before it becomes government property
- Substitute return : If you ignore filing, the IRS may file a substitute return on your behalf based on income information they have, which usually results in a higher tax bill because it excludes deductions and credits you might be entitled to
- Payment plans : If you cannot pay your tax bill in full, you can request an installment agreement with the IRS to pay over time, which can help reduce further penalties
- Extensions : The deadline to file an extension is the same as the tax deadline. If you miss the deadline, you cannot file an extension afterward but should file as soon as possible
In summary, missing the tax deadline can lead to significant penalties and interest if you owe taxes. Filing promptly and paying as much as possible can reduce these costs. If you expect a refund, you should still file to claim it within three years
