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What is the penalty for filing taxes late, or not at all?

5 min read

5 min read

Life happens—and deadlines are missed. For any number of reasons, some taxpayers miss the original tax deadline for the tax year, which could result in a failure to file penalty for affected taxpayers. In fact, any affected taxpayer who owes taxes and doesn’t file taxes on time could face a failure to file penalty from the Internal Revenue Service (IRS). So, what happens if you file taxes late? We’ll uncover information about the failure to file penalty from the IRS here.

What happens if you file taxes late?

A failure to file penalty is charged on tax returns with a balance due filed after the due date (Tax Day) or extended due date, unless there’s a cause for filing late. There is also a failure to pay penalty, which may also apply if you owe money to the IRS.

If you filed your federal income tax return after the deadline, will you incur a penalty or interest? If you owe tax, you usually will incur a penalty and interest. However, you won’t pay a failure to file or pay penalty and won’t accrue interest if you’re:

  • Receiving a tax refund
  • Living outside the country while serving in the military or in certain federally declared disaster areas and file and pay by your extended due date. Generally, military taxpayers serving outside the country get an automatic two-month extension to file. The IRS determines the postponement date for affected taxpayers in federally declared disaster areas.

If you have a balance due, the IRS can assess a late filing penalty and a late payment penalty. The IRS charges interest on unpaid tax from the late tax return’s due date until the date of payment. Let’s look at these penalties in more detail.

Penalty for filing taxes late and failing to pay

Woman sitting at desk filing taxes late

So, what’s the penalty for filing taxes late, you wonder? Well, it’s more complicated than a flat amount. Keep in mind, the penalty rules for a late tax filing may be impacted if you have a penalty for not paying. Let’s dig into the details.

  • Failure to file penalty: 5% of the balance due per month (or part of a month), up to 25% of your unpaid tax as of the due date
  • Failure to pay penalty: 0.5%, of the unpaid taxes for each month (or part of a month) that the tax balance remains unpaid, up to 25% of your unpaid taxes

As time goes on, the way your tax penalty is assessed changes:

  • For each month or part of a month that your tax return was late, the combined maximum penalty is 5% (4.5% late filing and 0.5% late payment), up to 25% of the unpaid tax at the time of filing.
  • The late filing penalty applies to the tax that remains unpaid after the due date. Unpaid tax is the total tax shown on your return reduced by amounts paid through tax withholding, estimated tax payments, and allowed refundable credits.
  • If after five months you still haven’t paid your tax bill, the failure to file penalty will max out, but the failure to pay penalty continues until the tax is paid, up to 25% of the unpaid tax.
  • When the failure to file and failure to pay penalties run concurrently, the maximum penalty assessed is generally 47.5%.
  • If your return is over 60 days late, the minimum penalty for failure to file is the smaller of $485 (for 2024) or 100% of the tax required to be shown on the return.

Related: Learn how to address IRS penalties.

How to avoid an IRS late filing penalty

If you’re sure you can’t make the tax deadline, file a tax extension. You can do this by filing IRS Form 4868. This will give you additional time to file—usually you have six additional months (until October 15) to file a return if you apply for extension by the original due date of the return.

Remember, you should pay any tax due by the tax deadline or you’ll incur an IRS penalty. Generally, if you pay at least 90% of your owed taxes with your tax extension request, you may not face a failure to pay penalty. This tax payment can be made through amounts you’ve had withheld, estimated payments you made during the year, and payments made at the time you request the extension. You should pay any remaining balance by the extended due date.

Late filers may be eligible for tax penalty relief with a penalty abatement if they meet certain requirements. To have an IRS first-time penalty abatement applied, you need to call or write the IRS. You may be able to avoid the penalty if you haven’t had any other IRS charges in the past three years. This option is available for those who incur failure to file and failure to pay penalties.

More help with IRS late filing penalties

Want to learn more about how to address IRS penalties? Maybe you’ve received an IRS notice and aren’t sure what to do next. Get help from an H&R Block tax professional who will handle penalty notices and communicate with the Internal Revenue Service for you. Or, if you’re ready to file your taxes and avoid IRS penalties altogether, you can file your taxes online today.

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