The Penalty For Filing Taxes Late

When can you start filing taxes 2024? What is the penalty for filing taxes late? We’ve got all the answers.

Table of contents

Key takeaways:...Read more

What is the penalty for filing taxes late?...Read more

How is the penalty for late tax filing different from the underpayment penalty?...Read more

Can you go to jail for not filing taxes?...Read more

How can you avoid a penalty for filing taxes late?...Read more

Filing a late tax return...Read more

Is there a penalty for filing a false tax return?...Read more

When can you start filing taxes for 2024?...Read more

Is there a penalty for filing taxes late?...Read more

Key takeaways:

The late penalty for filing taxes is 5% of unpaid tax per month, and is capped at 25%
You can get an automatic six-month extension by filing Form 4868 by April.
The failure to file penalty is different from the failure to pay penalty, and you can be hit with both at the same time.

What is the penalty for filing taxes late?

If you miss the last day to file taxes 2024 without filing an extension, the IRS starts adding a late filing penalty to your balance pretty quickly. They generally charge 5% of the unpaid tax for each month (or part of a month) that your return is late, up to 25%. So, if you owe $1,000 and file two months late, that’s $100 added each month, making your total late penalty for filing taxes $200—on top of the original $1,000, plus any interest on the unpaid balance. Let’s say you missed the deadline because life threw you a curveball—a family emergency or something unexpected. The IRS might cut you some slack if you can show that you had a good reason, but they’ll ask for documentation. Filing an extension before the April deadline buys you six more months to get everything in order without worrying about this penalty. Just remember, though, that this extension only applies to the filing, not the payment. If you think you’ll owe, it’s smart to send in as much as you can by April 15, so you can avoid late payment penalties and keep the IRS happy. FlyFin’s expert CPAs can help you avoid late filing penalties by preparing and filing accurate returns, while keeping your tax bill as low as possible.

How is the penalty for late tax filing different from the underpayment penalty?

The late filing (failure to file) penalty kicks in if you miss the tax filing deadline 2024, while the underpayment penalty (failure to pay) is for not paying enough taxes throughout the year. Filing late usually results in a 5% monthly penalty on unpaid taxes, up to 25%, while underpayment penalties are more like a gradual interest charge—around 0.5% of the unpaid amount per month. Say you’re a freelancer who didn’t make estimated quarterly payments last year, thinking you’d pay it all at tax time. The IRS will likely charge an underpayment penalty, calculated based on how much you should’ve paid each quarter. Then, if you don’t file by April 15, they’ll also add a late filing penalty. Both can add up, so if you’re self-employed, paying quarterly estimated taxes and filing on time can help you avoid the double hit. The way your tax penalty grows and changes depends on how late your return and payment are. For each month (or part of a month) that your tax return is late, the total combined penalty can reach up to 5% of the unpaid tax—4.5% for filing late and 0.5% for paying late. This can add up, but it maxes out at 25% of what you owe when you finally file. The late filing penalty is based on the tax that’s still unpaid after the April due date. So, unpaid tax means what’s left after taking into account anything you’ve already paid through withholding, estimated payments, or any credits. Now, let’s say five months go by, and your tax bill is still unpaid. The failure-to-file penalty maxes out at that point, but the failure-to-pay penalty keeps running until you’ve paid in full or until it also reaches 25%. When both the late filing and late payment penalties apply at the same time, the combined maximum penalty usually tops out at 47.5% of the unpaid tax. If you’re over 60 days late, there’s a minimum penalty for not filing. For 2024, this minimum penalty is either $485 or 100% of the unpaid tax, whichever is less. So even if you’re only a little late, it’s still a good idea to file as soon as possible to avoid these extra charges adding up. To manage underpayments, you should consider adjusting your withholding (talk to your employer about it) or making estimated payments throughout the year. You can use FlyFin’s estimated tax calculator to total your dues.

Infographic entitled What Is The Fine For Filing Taxes Late showing the penalty amounts for failure to file and pay.

Can you go to jail for not filing taxes?

It’s technically possible to go to jail for not filing taxes, but it’s not as common as people think. Simply missing the deadline or having trouble paying doesn’t mean you’re facing prison time. Jail typically becomes a possibility only if you’re intentionally dodging taxes and the IRS sees a pattern of evasion. They distinguish between a one-time “failure to file” and what they consider “tax evasion,” which usually involves deliberately hiding income or refusing to pay. Imagine someone who’s been self-employed for a few years but hasn’t filed a single return and is ignoring the IRS letters piling up at home. That’s the kind of situation that could trigger more serious consequences. If the IRS can prove someone is purposefully avoiding taxes, they could face up to a year in prison for each year of evasion, along with hefty fines. However, in most cases, the IRS is far more interested in getting people to pay what they owe than prosecuting them. The best way to avoid the penalty for filing taxes late and more serious trouble is to file on time and, if you’re struggling to pay, reach out to the IRS. They offer payment plans, and they’re generally open to working with you if you’re upfront and proactive about it.

How can you avoid a penalty for filing taxes late?

Avoiding the late filing penalty is usually as simple as getting your taxes in by the tax filing deadline 2024. But if that date’s creeping up and you’re nowhere near ready, you can request an extension, which gives you until October 15 to file. Filing for an extension is easy—just complete Form 4868 electronically or by mail, and you’re all set. Just remember, though, this extension only delays the filing part. If you think you owe taxes, it’s better to send in an estimated payment by April 15 to avoid late payment fees. Let’s say life’s been hectic, and you’re still gathering all your tax documents by the last day to file taxes 2024. Getting an extension is a lifesaver—it buys you some extra time to organize everything, avoid mistakes, and sidestep a late filing penalty. The IRS usually appreciates the heads-up, especially if you’re trying to get your taxes right instead of rushing to file with missing info. If you’re facing a true hardship, like a major medical expense or natural disaster, the IRS may even waive some penalties if you can show it’s a reasonable cause for the delay.

Infographic entitled Reasonable Causes For Penalty Abatement listing reasons for the IRS to waive your penalty.

Filing a late tax return

If the last day to file taxes 2024 has already passed, it’s best to file your tax return as soon as you can. The IRS charges a late filing penalty that adds up monthly, at about 5% of what you owe per month, capped at 25% of the total. So if you owe $2,000 and file four months late, that’s $400 in penalties on top of what you owe, plus interest. The longer you wait, the more it grows, so filing sooner helps keep those extra charges down. Let’s say you didn’t file on time because you misplaced some forms or underestimated your tax bill. As soon as you realize this, file right away to stop the penalty for filing taxes late. If you’re expecting a refund, the good news is there’s no penalty for filing late, but you have to file within three years to claim it. For those with a valid reason for the delay, like a major illness or natural disaster, the IRS may offer some penalty relief, but you’ll need proof. Once you’re ready, gather your documents, file electronically to speed things up, and if you owe more than you can pay right now, look into setting up a payment plan. Even paying a partial amount upfront helps reduce the interest and penalty totals while you settle the balance. You can use FlyFin’s tax penalty calculator to figure out what you owe the IRS.

Is there a penalty for filing a false tax return?

Filing false information on your tax return can lead to serious trouble, including big fines and, in extreme cases, even jail time. If the IRS thinks you intentionally lied about income, deductions, or anything else to avoid paying taxes, they may consider it tax fraud, which carries heavy fines and penalties. Typically, the fraud penalty is up to 75% of the unpaid tax on top of what you already owe, along with the accrued interest. Imagine a scenario where someone exaggerates deductions or leaves off a source of income. If the IRS catches it, they’ll likely add the fraud penalty on top of the unpaid balance. For example, if you owe $5,000 but hid $10,000 in income, they could tack on another $3,750 as a fraud penalty. And if the fraud is extreme enough, jail time could be on the table, though this is pretty rare. The IRS usually focuses on collecting the tax, but they won’t hesitate to prosecute if they see a clear case of intentional evasion. To stay on the safe side, be honest and report all your income sources, and if you notice an error after the tax filing deadline 2024, file an amended return as soon as possible. The IRS is generally more understanding when you come forward to fix a mistake, rather than if they catch something later on.

When can you start filing taxes for 2024?

The IRS usually starts accepting tax returns in mid-January. If you’re expecting a refund, filing early can get your money to you sooner, since the IRS processes returns on a first-come, first-served basis. Filing early is also a good way to protect yourself from tax-related identity theft, where scammers try to file using your Social Security number to steal your refund. Imagine you’ve got a steady W-2 job, and your employer sends out your form by mid-January. If you have everything you need, you can get a head start on filing and possibly see your refund in a few weeks. Early filing is also helpful if you know you owe money. Even though the payment deadline is still April 15, filing early gives you more time to plan how you’ll pay. Plus, if there are any issues with your return, you’ll have plenty of time to sort them out before the last day to file taxes 2024. For freelancers or people with multiple income sources, it’s smart to wait until you’ve received all your forms. Filing too soon can lead to errors if all your income hasn’t been reported yet. So, once you have all your documents, filing as soon as the IRS opens can help you cross taxes off your list and avoid last-minute stress.

Is there a penalty for filing taxes late?

If you file late, the IRS charges a penalty for filing taxes late but there are a few things to know that can help you manage it. Typically, the later you file, the more the penalty grows. The penalty is usually 5% of what you owe each month that your return is late, maxing out at 25% of your unpaid tax. However, if you owe zero dollars or you’re getting a refund, you won’t face this penalty, though the IRS encourages you to file on time anyway to avoid any complications. Imagine you’re late filing because you were dealing with a family emergency. If you file as soon as possible, it can limit the total penalty, since it stops growing once you submit your return. The IRS is often more understanding if you have a good reason for filing late—like a natural disaster or major illness—but they’ll ask for supporting documents. FlyFin’s advice? Don’t wait for the tax filing deadline 2024 and file as soon as you can, and if you owe, look into payment plan options. Filing even a little late is better than not filing at all, and if you’ve got a clean filing history, the IRS may even waive the penalty under its first-time penalty abatement program.

How Long Should You Keep Tax Returns?

How long should you keep tax returns? American taxpayers need to keep tax records for at least three years. This may change depending on which state you live in.