What Happens If I Missed the Tax Deadline this October 15th?

If you missed the tax deadline – know that you’re not alone. We’ve all been there. Life is super busy. We have to take care of our families and friends, work obligations, and all our other everyday responsibilities. With all of the hustle and bustle, that October 15th tax extension deadline passed. And darn it, you still haven’t filed. What should you do now?

Here is a breakdown of what happens when the tax extension deadline passes and the next steps you should take.

If I Missed the Tax Deadline, Will I Be Penalized for Filing Late?

Yes, if you missed the October 15th tax extension filing deadline, you can be penalized. The IRS allowed you an additional six-month extension of time to file your taxes (from April 15th to October 15). That was not an extension to pay taxes, only an extension to complete your return. In addition to any interest and penalties may be owed as a result of failing to file (and pay) your tax on time, you now are subject to a late filing fee on any unpaid taxes. The penalty, which includes interest, is generally 5% per month of any unpaid balance for up to 5 months. This penalty can increase to up to 25% of the remaining balance owed. To make matters worse, the interest continues to accrue until any liability is finally paid.

If you file your taxes more than 60 days late, you may receive an additional penalty of $435. That is the minimum late filing penalty which is the lesser of what you owe in taxes or the $435. So, it’s important to go ahead and file even if you can’t pay the outstanding balance in full. You can always work with the IRS to create a payment arrangement. More about that a little later. You need to file your taxes even if you’re missing critical information. You can file now, and amend later when the information becomes available.

What Happens if the IRS Owes Me a Refund?

If you think the Internal Revenue Service owes you a refund, you have 3 years to file and claim your refund. That is, three years from the original due date of the return. However, if you wait too long, you will forfeit any refund you might be entitled.

If you file your tax return after the October 15th deadline, and don’t owe any tax, you are in luck. There are no late filing penalties or interest if you don’t own tax on your return.

What Happens If I Don’t File My Return?

If you don’t file your tax return, the IRS will likely create a substitute return on your behalf. They base your return on income data such as W-2s, 1099s, and other documentation provided to them by your employer. Also from reports from your financial institutions.

It’s important to understand that this substitute return will not include any calculations for credits and deductions that you may be qualified for. Consequently, it is likely that the substitute return will result in a higher balance owed and penalties than if you prepared your own return.

What Happens If I Can’t Pay the Tax Balance Owed?

If you can’t pay your tax obligations with the IRS, it is important to go ahead and get the tax return filed. You can then work with the Internal Revenue Service in order to set up a payment plan.

The IRS’ Fresh Start Program allows taxpayers with balances of less than $25,000 to set up a monthly installment plan. This allows you to make payments on your balance over a number of years.

For those experiencing more financial difficulty, there is an “Offer In Compromise” option that allows you to settle your tax debt for less than the amount owed.

The interest and penalties for filing your tax return after the final tax deadline can be severe. It is important to get your return filed, even if you need to make arrangements in paying the balance owed to the IRS.

If you have any questions about steps you should take if you missed the tax deadline, please feel free to contact us for more information. We are happy to share more about our services, and how we work. If you are a new client, learn more about our initial tax consultation. And if you haven’t yet learned about our organized client discount – please ask!