The annual deadline for filing federal income tax returns is April 15 for most taxpayers. However, the rules around extending deadlines, penalties for late filing, and options to resolve back taxes are complex. This article provides a comprehensive guide to IRS regulations regarding late filing or non-payment of taxes.
When are taxes due?
The standard federal income tax return filing deadline is April 15 each year. For 2024, taxes are due on April 15, 2025, for the 2024 tax year. Tax returns must be postmarked on or before this date to avoid penalties.
However, some states have later deadlines due to local holidays:
- Maine & Massachusetts: April 17, 2025
- Hawaii: April 22, 2025
- Delaware & Iowa: April 30, 2025
Additionally, some categories have special filing considerations:
- US citizens abroad: Automatic 2-month extension to June 15, 2025
- Military personnel in combat zones: 180 days after leaving the combat zone
Key Takeaways
- Federal income tax returns must be filed by April 15 for most taxpayers
- Automatic extensions to October 15 filing deadline can be obtained
- Late filing and late payment penalties apply based on months past due
- Interest accrues on unpaid tax amounts even with extensions
- Non payment for several years can result in serious IRS enforcement
- Multiple options like payment plans exist to achieve tax compliance
What Is the Penalty for Filing Taxes Late?
You can face financial penalties for filing federal returns late unless you’ve filed for an extension. There are two main penalties:
1. Failure-to-File
A penalty of 5% of unpaid taxes per month, up to 5 months, or 25% of taxes due. The minimum penalty is $435 or 100% of taxes owed, whichever is lower.
2. Failure-to-Pay
A penalty of 0.5% of unpaid taxes per month after the deadline, up to 25% of total taxes due.
In addition, you’ll owe interest on unpaid amounts until your balance is paid off, regardless of having an extension. The IRS interest rate updates quarterly but generally equals the federal short-term rate plus 3%.
When Can I File a Tax Extension?
You can request an automatic 6-month extension to the October 15 filing deadline by submitting Form 4868 by April 15. This only extends the filing deadline, not the payment deadline. Your full or estimated tax payment must still be made by April 15 to avoid failure-to-pay penalties and interest.
Some categories granted automatic filing extensions include:
- Military personnel in combat zones: 180+ days
- Taxpayers abroad: 2 months
- Disaster victims: Varies
What If I’m Due a Refund?
If you are owed a tax refund and file late, there are no late filing/payment penalties. However, you forfeit your ability to claim the refund after 3 years – April 15, 2028 for 2024 returns. File as soon as possible, even if late!
What Happens If I Don’t File At All?
- You’ll accrue failure-to-file penalties and interest until taxes are paid
- IRS may file a substitute return on your behalf with penalties
- Outstanding debt not resolved after 10 years can result in wage garnishment, property liens, or levies
- Not filing for several years can constitute tax evasion with fines up to $250,000 and/or imprisonment
How Do I Resolve Back Taxes or Claim Relief?
If struggling to pay back taxes, several options exist to achieve tax compliance:
1. Payment Plans
IRS payment plans allow you to pay owed taxes over 6–72 months. Short-term plans (under 120 days) have no setup fees while long term plans have a small setup fee.
2. Offer in Compromise
Taxpayers proving inability to fully pay tax debt can settle for lesser amounts with an IRS Offer in Compromise. Strict eligibility rules apply.
3. Penalty Relief
You can request removal of certain penalties if late filing/payment was due to reasonable circumstances like death, disaster, poor advice, etc. Interest cannot be waived.
4. Non-Filer Voluntary Disclosure
If you haven’t filed in several years, voluntarily disclosing this to the IRS can reduce penalties. You must arrange for future compliance.
Bottom Line: It’s critical to file tax returns and pay owed taxes in a timely manner. Work with a tax professional to resolve filing delays, penalties, or unpaid taxes through the options above.