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Life is hectic. Paying Uncle Sam might not be at the top of your to-do list. And sometimes, the tax deadline can sneak up on you. Are you in trouble if you forget to file taxes before the deadline?
Let’s highlight what happens if you file taxes late and walk through your options:
What's the last tax filing day?
First things first: The deadline to file your federal tax returns for the 2023 tax season is Tuesday, April 18, 2023.
FYI: The standard date to file your tax returns is usually April 15, unless the 15th falls on a weekend or legal holiday. As April 15 falls on a Saturday in 2023, the IRS is giving you a few extra days to file. Nice!
Note: the deadline to file your state returns varies per state.
If you are falling behind and need to file for an extension, the last day for filing your returns is Monday, October 16, 2023. Extension deadlines are normally six months after the standard deadline.
Independent contractors – aka freelancers and gig economy workers – your tax filing deadlines are the same as 9-to-5 workers, or those with W-2 forms.²
Can I get an extension to file taxes later?
If you need more time and are asking: Can I still file taxes? The answer is 100%. The beauty of filing a tax extension is that it’s quick and easy.
So if you’re falling behind and need more time to sort through receipts, gather missing documents, and crunch some numbers, you can definitely file your taxes later. Just file a tax extension through the IRS website, which takes a few minutes.
A big disclaimer: if you request an extension to file taxes later, you’re still on the hook to pay your federal taxes by the April 18th deadline. Otherwise, the IRS late payment penalty kicks in.
How much of a penalty? It depends on how long you wait to pay your overdue taxes.3 You owe 0.5% of the unpaid taxes each month, to be at most 25% of your overdue taxes. For instance, if you owe $1,000 in taxes, the penalty is $50 each month your tax bill remains untouched.
Here’s how you can estimate how much you owe in taxes. First, you take your gross income. Next, you subtract your deductions and credits. What’s left is your taxable income. Last, you look at your tax bracket, which is based on your filing status and income, to estimate how much you owe.
This calculator can prove complicated, so consider talking to a tax professional or using a tax calculator resource to help get close to your amount owed.
You can pay your estimated taxes and file for a tax extension through the IRS website.
I missed the deadline — can I still file my taxes?
Yes! Absolutely. Let’s look at some of the most common scenarios for filing taxes late, and what fees and penalties you might get dinged with:
You are due a refund
Guess what? If you’re due a refund, and file your taxes late, you don’t owe any penalties.
Let’s say you’re owed a refund. After you’ve filed your taxes, you get that money by setting up direct deposit.
You can get your refund deposited straight into your Chime account. Just make sure it goes into the right bank account.
You can track your refund using the IRS’s handy Where’s My Refund? Tool. Or keep tabs via the IRS2Go mobile app.
To check your status, you’ll need your:
- Social Security number or ITIN
- Filing status
- Exact refund amount4
You owe taxes
If you owe Uncle Sam on your taxes, you will be on the hook for late fees and penalties. The late penalties for filing taxes are as follows:
- 5% of unpaid taxes for each month that a tax return is late
- The penalty won’t ever be more than 25% of the amount owed
- If your return was over 60 days late for the 2022 tax season, expect to get hit with a failure to file penalty of $435 or 100% of taxes owed, whichever is less.5
Bottom line: If you’re filing late, be sure to file as soon as you can.
For example, let’s say you owe $1,000, and you’re four months late. In that case, you’re looking at a late-filing penalty of $200. ($1,000 x 0.05) x 4 = 200. Or, if you owe $2,000 and are late five months, that’s a $500 money hole burned in your pocket. ($2,000 x 0.05) x 5 = $500.
You can check your balance by setting up an account through the IRS website. You can also make a payment with your debit or credit card on the IRS Direct Pay.
What if I can't afford to pay my taxes?
If you cannot afford your tax bill, the good news is that you have options. Let’s look at the most common ones:
Pay with a credit card
The IRS accepts credit card payments. The credit card processing fee depends on which payment processor you’re using, and is typically a percentage of the amount you’re paying. This amount hovers around 2%. So, if you owe $500 to Uncle Sam, the credit card processing fee is $10.
If you’re considering paying your tax bill with a credit card, weigh the interest fees you might pay if you carry a balance on that card. Sit down and figure out how long it would take to pay off that credit card debt.
If you opt for the short-term plan, which means you need to pay the full amount owed within 180 days, then it’s free to enroll. If you request a long-term plan, which gives you more than 180 days to pay your taxes, there’s a one-time setup fee.
If you can manage to pay the entire amount owed, but need a tad more time, then you can opt for what’s known as the short-term payment plan.
You’ll need to make the payment within 180 days of your taxes being due.6 You won’t need to pay any fees to opt for this plan – but you will be on the hook for any late fees or penalties. Plus, the late fees will continue to add on until you pay what you owe.
If you can’t pay the entire amount owed in one go, you can apply for a payment plan.
One option is an installment agreement. Installment agreements are also known as long-term plans. They give you up to 72 months (or six years) to pay your taxes and a monthly installment plan. Expect to pay a one-time user fee.7
Offer in compromise
If you’re financially strapped and can’t afford to pay what you owe, you might be able to negotiate for what’s known as an offer in compromise. In other words, the IRS is willing to settle for a smaller amount than your total balance.
Whether you qualify hinges on your unique circumstances, and the IRS will review them on a case-by-case basis. Here’s what they’ll be looking at:
- Ability to pay
- Asset equity
If you’re granted an offer in compromise, you’ll need to pay the new amount owed within a reasonable amount of time.
What happens if you don't file taxes at all?
As mentioned before, if you don’t file your taxes at all, you can expect to pay a penalty of 5% of the amount owed each month – or part of the month – you haven’t filed. This caps out at 25%, or after five months after the deadline.
For example, you owe $1,000. After one month flies by, you now owe $50. ($1,000 x 0.05) x 1 = $50.00. After month five, you owe $250, the maximum penalty amount.
You owe taxes and you haven’t filed
Here’s what you need to know about this double-whammy scenario. If you owe taxes and have yet to file your federal tax return, and both penalties (failure to file and failure to pay) hit the same month, the failure to file penalty goes down by the amount of the failure to pay penalty for that same month.
In other words, you’re looking at a combined penalty of 5% for each month – or part of a month—that you’re late on your tax return.5
Let’s say that after five months, you still haven’t paid the taxes you owe or filed. In that case, the failure to file penalty will max out, so you won’t get any more penalties on that end. However, the failure to pay penalty will continue to add up until you pay the taxes owed until it hits the max of 25% of the unpaid amount from the due date.5
Do you get a refund if you file taxes late?
Yes, you can still get a refund if you file late. However, you’ll need to file your taxes before receiving your refund. Usually, you have three years from the April deadline to claim your money.
How late can I file my taxes in 2023?
If you miss the deadline of April 18th for the 2023 tax season and request an extension, you’ll have until October 16th, 2023, to file without getting hit with any late fees or penalties.
What happens if you miss the tax deadline?
If you miss the tax deadline, you can still file your taxes. You would need to file for a six-month extension, which gives you until October 16, 2023. Note that you’re still responsible for paying your taxes by the April 18th due date.
You've got options if you need to file taxes late
We get it. Life happens, and you might not be able to file your tax return on time. No need to worry!
By understanding and exploring your options, you can decide on what’s best for you – and ideally, keep late fees and penalties to a minimum.
Depending on your situation, find out if filing a tax extension is right for you.