I missed the tax deadline. Now what?

Consequences of Missing the Tax Filing Deadline

If an individual taxpayer misses the tax filing deadline, they may face several consequences, including penalties and interest charges. Here's a breakdown of the potential repercussions:

1. Failure to File Penalty:

  - The penalty for not filing a tax return by the due date is 5% of the unpaid taxes for each month or part of a month that a tax return is late, not to exceed 25% of the unpaid taxes.

2. Minimum Penalty for Late Filing:

  - If the return is filed more than 60 days after the due date, the minimum penalty is either $435 (for returns due between 01/01/2020 and 12/31/2022), $450 (for returns due between 01/01/2023 and 12/31/2023), or $485 (for returns due after 12/31/2023), or 100% of the unpaid tax, whichever is less.

3. Failure to Pay Penalty:

  - The penalty for not paying the tax you owe by the due date is generally 0.5% of your unpaid taxes per month. This penalty can be as much as 25% of your unpaid taxes.

4. Interest Charges:

  - Interest is charged on penalties and unpaid taxes from the due date of the return until the balance is paid in full.

5. Combined Penalties:

  - If both failure to file and failure to pay penalties are applicable in the same month, the amount of the failure to file penalty is reduced by the failure to pay penalty.

Next Steps for Taxpayers Who Missed the Deadline

For taxpayers who have missed the filing deadline, the following steps should be taken to mitigate the consequences:

1. File as Soon as Possible:

  - To limit penalties and interest, file your tax return as soon as possible, even if you cannot pay the full amount owed.

2. Pay as Much as You Can:

  - Paying as much as possible will reduce the failure to pay penalty and interest.

3. Payment Options:

  - If you cannot pay the full amount, consider payment options such as an installment agreement or an Offer in Compromise.

4. Penalty Relief:

  - Some taxpayers may qualify for penalty relief if they have a history of filing and paying on time.

5. Contact the IRS:

  - If you disagree with the penalty amount, contact the IRS at the toll-free number provided on your notice or letter.

6. Consider an Extension:

  - If you need more time to prepare your tax return in the future, apply for an extension of time to file. Note that this does not extend the time to pay any tax owed.

7. Keep Records:

  - Keep any IRS letters or notices received, as they contain important information about your tax situation and how to address it.

8. Seek Penalty Relief:

  - If you acted in good faith and can show reasonable cause for not meeting tax obligations, the IRS may be able to remove or reduce some penalties.

9. Stay Informed:

  - Keep up to date with any [Tax Updates and News from the IRS] for the latest information that may affect your tax filing.

By taking these steps promptly, taxpayers can manage the impact of missing the tax filing deadline and set up a plan to address their tax liabilities.

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Sources:

Failure to File Penalty | Internal Revenue Service 2024-08-03

Newsroom | Internal Revenue Service 2024-08-02

What someone should do if they missed the April deadline to file and pay taxes 2024-08-02

Coronavirus Tax Relief and Economic Impact Payments | Internal Revenue Service 2024-08-03

2022 tax filing season begins Jan. 24; IRS outlines refund timing and what to expect in advance of April 18 tax deadline 2024-08-03

Missed the April 18 filing deadline? File now to limit penalties and interest 2024-08-02

Failure to pay penalty | Internal Revenue Service 2024-08-03

Tax updates and news from the IRS | Internal Revenue Service 2024-08-03

2020 RRC and EIP 1 and 2 - Taxpayer Advocate Service (TAS) 2024-08-03

Topic no. 201, The collection process | Internal Revenue Service 2024-08-02