What happens if I miss the tax deadline? Check Penalty and Late Fee!

The deadline to file your tax returns for 2023 was 15 April 2024 unless you qualify for free filing or come from an area where the tax filing date is extended. The taxpayers who have missed the tax deadline may be thinking about the aftermath of missing the tax day.

What happens if I miss the tax deadline?

The tax day deadline has passed, and for taxpayers who have missed the tax deadline, the aftermath or impact of missing the tax day depends on your circumstances and tax status.

The IRS advised that taxpayers who can’t file their tax returns on time should apply for tax extensions and get automatic six more months (15 October 2024)  to file their tax return for the tax year. However, they have to pay the tax they owe to the agency by the deadline. 

People who missed the April tax deadline and did not file the tax extensions may have to face some consequences, like penalties for late filing and legal action from the IRS. 

The following tax situation defines the impact of missing the tax deadline:

• You qualify for IRS Free File meaning you automatically have time till 15 October to prepare and file your tax returns.
• If you expect a tax refund on 2023 taxes, there is no penalty for late filing the tax returns but you must pay the taxes you owe before the deadline. 
• When you owe taxes to the agency and miss the deadline, there is a high chance you will be charged a penalty and late filing fees for your tax returns.

• IRS Extension 2024
• Federal Tax Refund Status
• IRS Payout Dates 2024
• Where is My PA Tax Refund
• Earned Income Tax Credit 2024
• EITC/ACTC Refund Schedule

Additional Consequences of Not Filing Taxes on the Tax Deadline 

The taxpayers can face other severe consequences beyond the penalty and fee charged by the IRS. Let’s break down the expected consequences:

• Interest on the unpaid tax: Taxpayers have to pay the interest on the unpaid tax, till they complete the tax payment in full. According to tax law, the interest is compounded daily on your unpaid tax, and the rate is set every quarter, so make sure you pay what you owe to the IRS on time to avoid paying the interest. 
• You can lose your tax refund: The IRS generally keeps your tax refund for three years in the treasury. Hence, if you fail to file your tax return in three years, you may lose your tax refund forever. 
• Legal consequences: The agency can take legal action against the taxpayers in extreme cases of failing to file and pay their taxes on time for a long time. The legal action includes asset seizing, collecting tax from your account without your permission, or withholding your wages through a court order. The agency takes these actions for tax debtors, chronic tax filers, and people who have not been obliged with tax compliance for a long time.
• Eligibility of credits of benefits: Missing the tax deadline can affect your eligibility to receive tax credits and benefits. You can damage your credit score and chances to earn some tax credits with continuous tax non-compliance. 

Penalty and Late fees on filing your tax return late 

Taxpayers, you must be aware of the following tax penalties to understand the impact of missing the tax deadline:

• Penalty when you fail to pay what you owe: You can be charged up to 25% of unpaid tax when you fail to pay taxes on time. The IRS charges ½ percent for each month you fail to pay taxes you owe to the agency.
• When you fail to file the tax return on time: Generally, the IRS charges a penalty of 5% of the unpaid tax you owe each month, which can lead to 25% with a delay in filing the tax return. 

What should you do when you miss the tax deadline?

Follow the below tips when you miss the tax deadline and do not file for a tax extension:

• You can reduce your penalty charges by applying for an IRS payment plan when you owe taxes to the IRS. Under this, you can apply for a short-term payment plan and save yourself from penalties when you owe less than $100,000 tax+penalty+interest. 
• You can use Free File Fillable Forms to file your tax returns as early as possible. The penalty under 10 days is not that harsh, so you must hurry. 
• Apply for an IRS Payment plan for an installment agreement of the tax you owe to the agency.  The Long-term installment plan is applicable when you owe $50,000 or less than that combining your tax+penalty+interest. 

Taxpayers, now you can’t apply for the extension, so make sure you diminish the damage as much as you can by following the above tips.