10 Things to Know about Filing Your Taxes Late

Chad Silver

Chad Silver

Managing Partner of Silver Tax Group, author of the book "Stop the IRS". Practicing a variety of tax issues, regulations, laws and rights. Specializing exclusively on tax matters involving IRS audits, negotiation, settlements & compromises.

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The average American spends $10,489 in federal, state, and local income taxes.

Most employees see at least a portion of those taxes come directly out of their paycheck. But when it comes time to file our taxes, many of us still find ourselves owing a bit more each April.

The vast majority of Americans dutifully file and pay their taxes each year. However, an alarming number don’t.

Whether they purposefully do so or are simply busy and don’t notice the impending deadline coming and going, they miss filing, paying, or paying and filing their taxes by April 15.

Last year, the normal April 15 tax deadline was pushed back to the 18th because the 15th fell on a Saturday. But this year, it falls on a Monday. Once that day comes and goes and you haven’t paid, your taxes are late.

If you’re worried you might not make that deadline or are just curious what would happen if you failed to file, keep reading. We’re bringing you 10 things you need to know about filing taxes late.

1. Many People File Taxes Late

If you’ve always been punctually paying your taxes, realizing that you have or are about to miss the deadline for the first time might leave you in a panic.

But the reality is that filing and paying late, or simply not doing so at all, is more common than you might think.

A whopping seven million Americans don’t file income taxes each year. That’s nearly five percent of the entire U.S. population.

Filing late does mean a tax penalty. But it isn’t the end of the world. File your taxes as soon as you can, and you’ll be back on track.

If you owe multiple years worth of back taxes, though, the consequences for continuing to fail to file and pay become more serious.

2. Automatic Extensions Exist for Those Who Need Extra Time To File Taxes

The IRS sometimes offers automatic extensions on the April 15 filing deadline for taxpayers in certain situations. 

These extensions most commonly affect victims of natural disasters, such as hurricanes and wildfires. You won’t need to apply for these extensions in order to be eligible. Instead, the IRS automatically extends them to residents of counties who are determined to have been affected by the disaster.

If your home or property was damaged in a storm, but your county isn’t one of the ones listed by the IRS, you can still apply for an extension using the storm as your explanation.

Your new deadline will be determined by the IRS. It depends on when the storm hit, the extent of the damage, and how close it was to other filing deadlines.

3. Natural Disasters Cause Most of the Automatic Tax Extensions

Natural disasters across the United States led to a number of extensions by the IRS in 2018.

Victims in two counties in California affected by wildfires and high winds were given until November 30, 2018 to file.

Two counties in Hawaii, including Honolulu County where the city of the same name is located, were given extensions after landslides, flooding, and severe storms caused major damage. Those residents were given until August 15, 2018 to file.

Other victims of flooding and severe storms in counties in Indiana, North Carolina, and Alabama also received extensions until June, July, and August of 2018.

Other natural disasters that strike later in the year or cause widespread damage to lead the IRS to extend deadlines into the next tax year. Two storms that happened in 2019 prompted the IRS to extend the filing deadline for 2017 taxes until 2019.

Tax deadlines for filing taxes from 2017 have been extended for victims of Hurricane Michael living in 16 counties and Florida and 31 counties in Georgia until February 28, 2019.

For victims living in dozens of counties in North Carolina and South Carolina, as well as several counties in Virginia that were affected by Hurricane Florence, the filing of 2017 taxes was extended until January 31, 2019.

If you live in an area that was affected by a major natural disaster in the previous year, check the IRS website to see if any extensions or other tax relief have been offered. You might just find that you won’t be filing late after all.

4. Some Individuals Qualify for Other Automatic Extensions From The IRS

Natural disasters aren’t the only reason that the IRS extends automatic extensions to taxpayers.

Any U.S. citizen or resident who is living abroad and paying taxes to the U.S. automatically has until June 15 to file their taxes. This extension also applies to any active duty members of the U.S. military.

But while these extensions give you more time to fill out your paperwork, they don’t offer you any more time to pay. You’ll still need to estimate your taxes and pay them by the April 15 deadline in order to avoid any penalties.

Another extension is provided for members of the U.S. military serving in Afghanistan or other combat zones. These taxpayers have up to 180 days after their tour ends to file and pay their taxes.

5. You Can Still File for an Extension

Just because you weren’t eligible for an automatic extension, it doesn’t mean that you necessarily can’t get one.

As mentioned, if your home or property was damaged by a natural disaster, you can still file for an extension even if one isn’t automatically offered to your county.

But anyone can actually file for an extension, whether their home has been damaged in a storm or not. Any number of reasons can allow you to qualify. 

Maybe you are caring for an ill family member, or you’re ill yourself. You could have lost your job, be moving to a new state, or have something going on in your life preventing you from filing.

Taxpayers can go online to the IRS’s Free File page to request an extension on their taxes.

However, these extensions come with a catch. While you will be able to wait to file, you won’t be able to wait to pay. You’ll need to estimate how much you’ll owe in taxes and still pay that amount by the April 15 deadline. Otherwise, you’ll still be paying late and may face penalties and fees.

But if you’re only worried about filing late and facing those consequences, this option will help buy you some more time.

6. Paying Taxes Late and Filing Taxes Late are Different

There is a reason that many IRS tax filing extensions aren’t payment extensions; the two actions are separate in the eyes of the IRS.

If you fail to file your taxes but still pay, you’ll face a different penalty than if you file your taxes but fail to pay.

The penalty for failing to file your taxes on time — if you don’t have an extension — is five percent of the additional taxes owed each month, up to 25 percent maximum. If your file more than 60 days after the deadline, you’ll owe a minimum of either $135 or 100 percent of those additional taxes, whichever number is lower.

The penalty for paying your taxes late is .5 percent, or half of one percent, of your additional taxes owed, up to 25 percent maximum.

If you fail to pay or file your taxes, the IRS drops the penalty for not paying. In that case, you’ll only pay the five percent fee each month, up to 25 percent, or the $135 fee after 60 days if that number is lower.

The penalty for failing to file your taxes is obviously worse than the one for failing to pay. If you’re struggling financially and feeling nervous about paying your taxes, the best thing you can do is go ahead and file them and then take the penalty for failure to pay.

As soon as you are able to, you can then pay your taxes and the interest fees that you’ve accumulated and avoid any other additional penalties.

7. There Are No Grace Periods From The IRS

When it comes to filing your taxes, there are no grace periods.

If you haven’t applied for or requested an extension on your taxes or you don’t automatically qualify for one, you don’t get six hours, a day, a week, or any other time period to get your taxes filed and paid before you start accumulating penalties.

If something serious happened on or very close to April 15, you can contact your local IRS office to try to get excused. The best way to ensure you don’t get a fee, though, is to file and pay your taxes while requesting to be excused.

It’s also a good idea to plan to have proof ready to show why you were unable to file. This could be hospital records or a doctor’s note, an accident report, or similar material. The IRS requires “reasonable cause” for someone to miss filing and paying their taxes without assessing a penalty.

8. Paying a Portion of Your Taxes Won’t Save You, But It May Help

Paying only a portion of the amount of taxes you owe by the deadline won’t help you avoid the penalties. But that doesn’t mean you shouldn’t do so.

If you can’t afford your entire tax payment by the due date, you might be tempted to wait to pay entirely. But by doing so, you’ll start paying that .5 percent interest rate for each month that you are late.

Making a partial payment won’t eliminate this fee, but it will reduce your total bill. In turn, that will reduce the amount of interest you have to pay.

If you only owe a few hundred dollars in taxes, a partial payment won’t change your monthly penalty all that much. But if you owe several thousand or more, making as big a payment as you can help you save a lot of money in interest later on.

9. If You Don’t Owe, You Don’t Pay 

While it may seem obvious, many taxpayers don’t realize that if they don’t owe, they don’t pay.

If you don’t owe taxes and are instead of expecting to receive a tax return, you’ll owe nothing, as five percent or .5 percent of zero is zero.

Of course, this isn’t to say that you shouldn’t file your taxes simply because you know that you won’t owe anything.

Tax laws are constantly changing and so are our own personal situations. Just because you didn’t owe anything last year and received a return — and earned the same amount of income this year, it doesn’t necessarily mean that you don’t owe anything. 

It’s always important to file your taxes each year to ensure that you don’t accidentally and possibly unknowingly neglect to pay taxes you owe and end up accumulating penalties.

If you’re already missed the deadline by the time you’re reading this, don’t fret. You can still get your tax return. All you need to do is file your taxes as soon as possible, and you’ll receive your return.

10. The Penalties Get Worse

The five percent and .5 percent penalties may not seem like a lot when you owe very little in taxes, especially if you’re going through a financial rough patch. You might be tempted to wait to pay so that you’ll have money for other bills.

Or you may make the mistake of thinking that because you don’t owe thousands or more in taxes, the IRS simply won’t notice that you haven’t paid.

But the IRS does track those who fail to pay. And while you won’t see any punishments besides penalty fees for at least a few months after the deadline passes, this won’t last forever.

Eventually, the IRS will begin using other tactics to collect back taxes owed. Eventually, they may take your car, your home, your retirement account, or other assets in order to get their money.

You do have rights before that can happen. But that doesn’t mean that the IRS won’t continue to fight in order to get you to pay any taxes and penalties that you owe.

Filing Taxes Late – Don’t Panick

Filing taxes late is never a good idea. But whether you mess up and forgot to file or simply couldn’t afford to pay by April 15, don’t panic.

Just file your taxes as soon as possible, pay what you can, and pay the rest as soon as you are able to.

If you’ve found yourself going a year, two years, five years, or even longer without paying your taxes, you’re going to want to seek professional help before you start trying to figure out how to pay your bill.

Contact us today to see how we can help you get relief from IRS actions, stop your wages from being garnished, and more.

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