What Is the Penalty for Filing Taxes Late?
The failure-to-file penalty is usually 5% of the tax owed for each month your return is overdue, up to 25% of the bill.
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If you owe taxes and didn't file your federal income tax return by the tax deadline, there may be consequences in the form of IRS penalties and interest.
What happens if you file late and owe taxes?
Failure-to-file penalty
The failure-to-file penalty is 5% of your unpaid taxes for each month or partial month the return is late, up to a maximum of 25% of your tax bill. This penalty is assessed if you owe taxes and fail to submit your tax return on time.
Late-payment penalty
The late-payment penalty is 0.5% of your unpaid bill for each month your outstanding taxes are unpaid, up to 25% of your outstanding bill, plus interest. This penalty is assessed if you fail to pay your tax bill by the deadline.
More details on penalties
The IRS could hit you with both a late-filing penalty and a late-payment penalty if your bill and return are both overdue. If both penalties are issued in the same month, the late-filing penalty is reduced by the amount of the late-payment penalty for that month, so you'd pay a combined fee of 5% for each month (or partial month) your return is late.
If your return is more than 60 days late, the minimum failure-to-file penalty is $510 or the entire amount of tax owed, whichever is smaller. The late-filing penalty maxes out after five months of your return being late, but other penalties and interest may continue to accrue.
Some late filers may be eligible for tax relief in the form of a penalty abatement if they meet certain conditions. For example, you might be eligible for penalty relief if you have a reasonable explanation for filing late or if this is your first time missing the deadline.
What happens if you file taxes late but don't owe anything?
There is usually no penalty for filing your tax return late if you're owed a refund. But if you're required to file by law, you should still plan to submit your return as soon as possible.
Also, keep in mind that you typically have just three years to claim any tax refunds due to you. This means that if you didn't file your tax return last year but think you were due a refund, you only have until 2027 to file a tax return for that year to claim it.
5.0
NerdWallet rating- Federal: $79 to $139. Free version available for Simple Form 1040 returns only.
- State: $0 to $69 per state.
- Expert help or full service filing is available with an upgrade to Live packages for a fee.
How to avoid a penalty for filing taxes late
A tax extension can get you an extra six months to finish your tax return. The deadline to request one was April 15.
If you did get an extension, remember that it only gives you more time to file your tax return, not more time to pay your taxes. You were still required to submit an estimated tax payment by the April 15 deadline. Otherwise, anything you owe past the tax deadline might be subject to that late-payment penalty and interest.
Some people, such as victims of natural disasters, certain members of the military or Americans living overseas, may automatically get more time to file. Remember to keep an eye on the calendar for the Oct. 15 extension deadline — if you miss it, that failure-to-file penalty could come back to haunt you.
How long can you go without filing taxes?
While the government usually has just six years to charge you with criminal tax evasion, it has forever to collect the taxes you owe and assess penalties. In addition to the failure-to-file and late-payment penalties, these things could happen to you when the IRS catches up:
Interest: On top of penalties, interest accrues on your unpaid taxes.
A substitute return: If you fail to file but the IRS has some information needed to calculate your taxes, such as your W-2 form, you may be notified by mail that it has filed a return on your behalf. It won’t consider the tax credits, deductions or other tax breaks you may have taken if you’d done your taxes.
Lost refunds: You may be missing out on money you’re owed. In most cases, you get a three-year window to file previous years’ returns. Once this window closes, you forfeit your tax refund.
» MORE: How to file back taxes
5.0
NerdWallet rating- Federal: $79 to $139. Free version available for Simple Form 1040 returns only.
- State: $0 to $69 per state.
- Expert help or full service filing is available with an upgrade to Live packages for a fee.