The annual deadline to file your federal income tax return is typically April 15. If you miss this deadline, there can be consequences, but the type of penalty depends on several circumstances, including:
- Did you request a tax extension?
- Do you qualify for a refund?
- Do you owe taxes?
Here’s everything you need to know about the October 15 tax filing extension deadline and penalty fees for failing to pay or file your federal income taxes on time.
NOTE: Each state has its own requirements and regulations for tax return extensions, so reach out to your state tax authority for details if you need an extension for your state income tax in addition to your federal taxes.
Did You Request a Tax Extension?
If you requested an extension by the April deadline, you get six extra months to file your income tax return. It is important to note, however, that an extension to file your taxes is not an extension to pay your taxes. You must still pay any tax owed by the April deadline to avoid late payment fees.
The filing extension prevents you from being charged late filing penalty fees as long as you pay by the regular tax deadline and file by the extended deadline—typically October 15. For tax year 2018 (taxes originally due on April 15, 2019), the extended deadline to file is Oct. 15, 2019.
If you expect to owe income taxes, estimate the amount due, and pay it with your extension request. Any payment made with the request will reduce or eliminate interest and late payment fees. If you are not able to pay your taxes by the April deadline, you may be able to qualify for a payment plan, installment agreement, or other relief programs through the IRS.
Do You Qualify for a Refund?
If you are owed a refund or do not owe any taxes, there is no penalty for filing late, and you do not need to request an extension. The IRS will hold your money for three years from the original filing deadline. You cannot receive your refund without filing your taxes, and you must submit your return within that timeframe, or you will lose your rights to your refund.
Do You Owe Taxes?
If you owe income taxes, answer the following question: Did you fail to file, fail to pay, or both?
If You Paid but Didn’t File
If you do not file your return by the deadline (April 15 or October 15 if you filed an extension), you will owe a failure-to-file penalty. Currently, you will be charged 5% of the taxes you owe for each month (or part of the month) you fail to file past your deadline. The most significant late filing penalty you can face is 25% of the taxes you owe.
If You Filed but Didn’t Pay
If you file your return on time but do not pay the taxes you owe by the April deadline, you will owe a failure-to-pay penalty. The current penalty is 0.5% of the taxes you owe for each month (or part of a month) you fail to pay your taxes past Tax Day (the April 15 deadline). If the IRS issues a notice of intent to levy or seize your property, the rate increases to 1% per month. The maximum late payment penalty is 25% of the taxes you owe.
You also start accumulating interest on your unpaid taxes one day after your bill was due. The interest compounds daily until you pay the bill in full. The current interest rate is 5% but is subject to change.
If You Didn’t File or Pay
If you didn’t pay or file on time, you will owe a combined penalty fee of 5%—a 4.5% penalty fee for late filing and 0.5% late payment—for each month or part of a month that you fail to file and pay. After five months, the failure-to-file penalty will max out while the failure-to-pay penalty will continue until you pay your taxes, up to 25%. Overall, your total potential penalty will be 47.5% of the taxes you owe (22.5% for late filing and 25% for late payment).
Was This Your First Time Filing Late?
The IRS offers a first-time penalty abatement to forgive qualifying taxpayers from failure-to-file and failure-to-pay penalties. You may qualify if you meet the following requirements:
- You weren’t required to file a return before, or you haven’t received any penalties in the past three tax years.
- You filed all required returns or filed an extension of time to file.
- You have paid or set up a payment plan for any tax due.
Need Help Meeting October 15 Tax Filing Deadline?
If you requested an extension to file but still need to file your return, consider a professional tax preparation service. You can save 50% off your return with TaxSlayer. Use code SLAYIT50 at checkout to receive your discount.