Filing Late? Here's What Happens When You File Taxes Late

December 28, 2022

Missed the tax deadline? You can still file today! What happens if you file taxes late depends on how soon after the deadline you pay the taxes you owe.

Many things can happen to cause someone to be late filing taxes. Sometimes life just gets too busy and we forget.

But what happens if you file taxes late?

It’s important to keep tax deadlines, but if you find yourself past the tax filing due date, this article will explain what happens if you file taxes late and what you should do. 

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When are Taxes Due? 

when are taxes due

Avoid what happens if you file taxes late by filing your taxes before the tax return due date. Tax Day is the day that tax return forms are due to the IRS.

Tax Day each year is usually April 15th but sometimes circumstances will cause this date to fluctuate.

For example, in 2022 Tax Day was moved from April 15th to April 18th.

tax season due dates chart

There are also many other tax due dates you should know about like when tax payments are due or when employers are supposed to have W2 form and 1099 form sent out. 

Some people with special circumstances are exempt from these tax due dates.

For example, if you are a disaster victim, in a combat zone, or living aboard then you may have an automatic 2 month or 180-day extension on your tax return due date.

What Happens If You File Taxes Late?

what happens if you file taxes late

So, it’s past the tax return due date and you haven’t filed your tax return. Now what? What happens if you file taxes late? Well, you may accrue a failure to file penalty for not filing taxes or a failure to pay penalty for not paying taxes. 

What happens if you file taxes late is that you’ll start to accrue a penalty interest fee on any taxes you owe. 

If you are late filing, then you still want to file your 1040 form as soon as possible. You might also want to submit a 843 tax form to explain why your return was late to the IRS.

If your return was late through no fault of your own, this form could potentially help you avoid fees.

An interest fee and potentially needing to fill out some extra forms are essentially what happens if you file taxes late, but more can be involved. 

How to File Taxes Late 

how to file taxes late

Now that you know more about what happens if you file taxes late, how do you file taxes late? Basically, you want to file and pay taxes as soon as possible. 

The very first thing you should do is file your tax return as soon as possible.

You are still able to file your tax return through whatever channel you usually use, even if it’s after the tax filing due date. 

What’s the Penalty for Filing Taxes Late?

the penalty for filing taxes late

The first thing that happens if you file taxes late is you’ll start accruing a penalty for filing taxes late, including an interest for not filing on or before Tax Day.

This penalty and interest are 5% of any tax money you owe the IRS added onto what you owe, per month. 

Unpaid taxes also accrue a late penalty and interest. Late payments have a 0.5% penalty for not paying your taxes on time. Both penalty interests cap at 25%.

The longer you are late in filing taxes and paying your tax bill, the more these penalty fees will grow.

So, it’s important that you waste no extra time and file your tax return and pay the taxes you owe as soon as possible.

These accumulating fees on the taxes you owe are the primary downside to what happens if you file taxes late. 

How Long are Tax Extensions?

If Tax Day comes, and you know you are going to need more time, you can request a tax extension that day. But how long are tax extensions? 

After Tax Day it will be too late to file for a tax extension.

Fortunately, the IRS grants an automatic extension to anyone filing an extension, so the process is very easy and simple to do. 

how long are tax extensions

To request a tax extension, you’ll need to submit a 4868 tax form. Once you’ve submitted this form, you’ll be automatically given a 6-month extension on your tax deadline.

Filing a tax extension will give you more time to file your tax return, but this does not change the due date of your tax bill. 

If you haven’t been late filing taxes in the past 3 years, then you could qualify for a one-time tax penalty relief.

Filing for a tax extension is one of the answers to what happens if you file taxes late and one thing you can do in this case. 

What Happens If You Don’t File Taxes?

what happens if you don’t file taxes

We’ve answered what happens if you file taxes late, but what happens if you don’t file taxes at all?

The first thing that will happen is you will be charged the previously mentioned tax penalty fees and interest on whatever tax money you owe.

If you continue to not file taxes, the IRS may bring legal action against you.

This legal action could include not only the penalties and interest but also the confiscation of property through tax liens, garnishing wages, seizing assets, and more.

If you refuse to file taxes, the IRS may file a return for you called a “substitute for return.” 

This substitute for return will file your tax return but it won’t give you the tax refund, tax credits, or tax deductions you could have gotten.

These things aren’t necessarily what happens if you file taxes late, because in that case you are still filing, you’re just filing late. 

Many people are required to file a tax return, but there are some instances where someone would not be required to file a tax return.

For example, if you did not earn more than the minimum taxable income requirements for tax filing, then you may technically be exempt from filing taxes. 

minimum income requirements for tax filing chart

Even if your income is lower than these minimum requirements, you may still be required to file a tax return if the following apply to you: 

  • You got paid on a 1099-MISC form as a self-employed person
  • You have health insurance from a state or federal marketplace
  • You are someone’s dependent on their tax return
  • You are married filing separately

Also keep in mind that just because you don’t have to file a tax return that doesn’t mean you don’t want to still file.

The downside to not filing is that you won’t get a tax refund and you won’t be able to claim tax credits like the child tax credit or the earned income tax credit

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How Filing Back Taxes Works

back taxes definition

What are back taxes and how does filing back taxes work? Back taxes refer to unpaid tax bills. This is money you owe the IRS but have not yet paid.

These taxes are now past due and considered back taxes. Back taxes can also include tax bills that you’ve paid partially but not fully.

Accumulating back taxes is one part of what happens if you file taxes late. 

It is not ideal to have back taxes because these tax bills accumulate interest causing you to pay more over time.

If you need to know how to file back taxes so you can pay your taxes, you can coordinate with the IRS’s collection agency to create a payment plan or start an installment agreement. 

How Many Years Can You File Back Taxes?

how many years can you file back taxes

How many years can you file back taxes? The IRS wants all taxpayers to file a tax return for every tax year. This means that you could file a tax return for any previous year.

But the first step you should take in getting caught up is making sure you at least have the previous 6 years of tax returns filed and paid.

This will officially put you back in good standing with the IRS. 

How to File Previous Years Taxes

how to file previous years taxes

You can file previous years taxes the same way you file this year’s taxes. If you use the same tax return preparers every year, then you can still use those same tax preparers for previous years taxes.

The information and tax forms you use to file will just be from those previous years instead of this year. 

What If You Can’t Pay Your Tax Bill? 

what if you can't pay your tax bill

One question around what happens if you file taxes late is what happens if you owe money to the IRS, but you can’t afford to pay the tax bill they send you?

If you can’t pay your tax bill, you can work with the IRS to submit something called an “Offer in Compromise.”

This allows you to potentially settle with the IRS for less than you owe so you can make a more manageable payment or start a payment plan. 

You don’t necessarily have to pay the tax bill all at once, you can set up an installment payment plan with the IRS so you can make payments in smaller increments over time instead of one large amount all at once. 

You might also be able to qualify for a “currently not collectible” status with the collection’s agency, so they know not to bother you right now about seeking payment.

What If My Tax Preparer Did Not File My Taxes?

what if my tax preparer did not file my taxes

What do you do if your tax preparer doesn't file your taxes? If your tax preparer doesn’t file your tax return or files your tax return late, then you will be penalized.

But, if your tax return wasn’t filed or was filed late and you can prove it wasn’t your fault, you can potentially overturn any penalties. 

Submit the 843 tax form to explain what happened to the IRS about your late tax return.

On this document there will be an explanation section where you can give details about what caused your tax return to be late. 

If you suspect your tax preparer of fraud, then you’ll want to also submit the 14157 tax form. 

On this document you’ll want to include as much information about your tax preparer as possible so that the IRS can investigate the problem.