In that case, your penalty is less severe than for not filing. Let’s say you file an extension, but you can’t pay all your taxes. What’s the IRS penalty for not paying your taxes on time? You’d also pay interest on what you already owe. On May 25, you finally get around to filing your taxes. 2įor example, let’s say you owe $1,000 in a normal tax year, then you miss the April 15 deadline and you don’t file an extension. For every month you don’t file your taxes, you’ll pay an additional 5% of what you owe up to 25%. If so, failing to file an extension could cost you a pretty penny. 1 What happens after three years? The IRS looks both ways and pockets that cash. The IRS will hold onto your money for three years. You just won’t get your tax return money until you file. If you are, you won’t get a penalty for filing late. When it comes to late penalties for not filing your taxes, you could be in one of two scenarios: Are you expecting a refund? What’s the IRS penalty for not filing your taxes on time? The penalty for not filing your taxes is 10 times more severe than filing and not paying. This is worth repeating: yes! Even if you can’t pay a dime of your taxes, you should file an extension. If you owe on taxes, should you even file an extension? Once you figure out what you owe, send your payment with your tax extension form. You can figure out how much you owe with their online tool at IRS.gov. If you haven’t filed your taxes and you need to file an extension, how do you know how much you owe? Otherwise, you’ll also have to pay interest and late penalties. If you owe on taxes and you need to file an extension, you must pay when you file your extension. A tax extension is free! What does a tax extension not do?ĭon’t overlook this: A tax extension doesn’t give you more time to pay taxes you owe.
Go to IRS.gov to download the form or get more details about making a payment. You’ll get an automatic extension just by paying, but you do have to fill out your return eventually. To get an extension without the form, you can pay all (or part) of your estimated income taxes online. You’ll need to fill out IRS Form 4868, then mail in your form or file it electronically using IRS e-file. While you’ll avoid penalties for not filing, you’ll still be liable for any amount you actually owe. If you owe taxes, filing an extension can help you avoid the tax filing penalty-which can be severe. In a normal tax year without IRS exceptions, this would mean pushing your filing deadline from April 15 to Oct. Simply put, a tax extension gives you six extra months to do your taxes.
We’ve got the full scoop on everything you need to know about tax extensions. Not sure what that even means or how it works? Don’t worry. Well, in that case, you may need to file a tax extension. Then, in the blink of an eye, Tax Day arrived and you still hadn’t done your taxes. Maybe you had an unexpected life event or you were missing an important document and thought, I still have until next month. You got your W-2 or 1099 in February and you said, Meh, I’ll file these eventually.