What’s the Worst Thing That Will Happen If You File Your Taxes Late (or Don’t File at All)?
With the April 15 tax deadline approaching tomorrow, many Americans are rushing to fill out their returns. Personally, my phone is ringing off the hook with all my procrastinating friends asking last-minute questions. And well done that they even met the deadline, kind of crazy.
But what happens if you miss the deadline? The consequences vary significantly depending on whether you simply file late or don’t file at all . Let’s look at what happens in either scenario and what your options are if you’re not ready to file by tomorrow.
What happens if you file your tax return late?
First of all, it is important to clarify the difference between failure to file a return and failure to pay. Non-filing of a tax return means failure to file tax returns when due, and tax delinquency occurs when taxes due are not paid when due. The most important tip here is to file your return even if you can’t pay. Filing your return on time avoids the penalty for failure to file, which is usually higher than the penalty for failure to pay.
Request for extension
The good news is that the IRS is offering a six-month extension for anyone who needs more time to prepare their tax return. This means that if you request an extension by tomorrow, you have until October 15 to submit your application without penalty.
Here’s what you need to know:
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File Form 4868 (Application for Automatic Extension to File U.S. Individual Income Tax Return) by April 15.
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This gives you until October 15, 2025 to file a complete tax return.
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Important : file extension is NOT an extension of the tax payment deadline.
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You still need to calculate and pay all taxes due by April 15th to avoid penalties.
Filing an extension is completely legal and does not increase your audit risk, but tomorrow is the last day to submit your request through this route.
Penalties for late payment (even with extension)
As I mentioned above, there is a big difference between not filing a return and not paying. The IRS imposes a penalty of one-half percent (0.5%) for each month or part of a month, up to a maximum of 25% of the amount of tax that remains unpaid from the due date of the return until the tax is paid in full.
Interest accrues on both unpaid taxes and penalties from the date of payment until the debt is repaid. These penalties apply starting April 15 until you pay your tax bill in full.
State Tax Issues
Most states follow the same renewal rules as the federal government, but the deadlines and specific requirements vary. Check with your state tax agency for specific renewal procedures.
What happens if you don’t file a tax return at all?
Failure to file a tax return at all is much more serious than filing a tax return late, with consequences that may include:
Serious financial sanctions
If you owe money to the federal government, the penalty for failing to file a tax return is about 5% of the amount of unpaid taxes owed each month until you reach the 25% maximum. This fine is ten times the fine for non-payment. After 60 days, you will be charged $485 or 100% of the tax due, whichever is less. In addition, the same interest that applies to late payments also applies here.
Loss of Refund
If you are eligible for a refund, you generally will not face late filing penalties. However, you must submit your claim within three years of the original payment date to claim a refund. After three years, you will lose your refund forever.
IRS Enforcement Actions
For those who persistently fail to file returns and owe taxes, the IRS may take more stringent action:
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Tax liens on your property
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Salary deduction
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Seizure of assets
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The IRS may file a “Substituted Return” (SFR) on your behalf, which will not include any deductions or credits you may have claimed and will often result in a higher tax bill than if you had filed the return yourself.
Criminal prosecution
In extreme cases of willful failure to file tax returns, especially when combined with other tax evasion tactics, you may face criminal tax evasion charges. This means a penalty of up to $100,000 and five years in prison. Fortunately, the IRS typically only pursues criminal charges in cases of intentional fraud or persistent failure to comply, rather than simple errors or delays.
What to do if you can’t pay
If your reason for not applying is your inability to pay, remember:
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Apply anyway : The penalties for not filing are much worse than for not paying.
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Request a payment plan : The IRS offers installment agreements for taxpayers who cannot pay in full.
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Consider an “offer in compromise” : In cases of severe financial hardship, the IRS may agree to an amount less than the full amount owed.
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Query the status “Currently Not Collectable” . If you are facing severe financial hardship, the IRS may temporarily pause debt collection efforts.
To learn more about the payment options described above, it is best to contact an IRS agent .
Bottom line
Missing a tax deadline isn’t ideal, but filing for an extension is easy and gives you breathing room to properly prepare your return. It’s important to remember that it’s always better to file (even if you can’t pay the debt) than not to file at all. Penalties for failure to file are significantly higher and can lead to much more serious consequences.
If you’re pressed for time with tomorrow’s deadline approaching, consider filing for an extension today and then tackling your full tax situation when you have more time to prepare properly. This will also help you buy time to consult with a qualified tax professional .