The April 15 tax deadline has passed, but let me share a story of why it’s crucial that you still file your return and pay Uncle Sam as much as you can as soon as you can.
First, though, let me address some questions and complaints I’ve heard.
Some misguided people suggest that staff cuts at the IRS might reduce their chance of being audited, so they don’t have to worry about filing because the government won’t notice. Others are angry at the market turmoil spurred by President Donald Trump’s erratic tariff announcements, so they question why they should pay taxes at all.
Chaos aside, the IRS does not play. Even if it’s past April 15, you should still file your return if you owe money.
This gets to my story: Last year, my son discovered the cost of missing the tax deadline.
During the 2023 tax season, he was 25 and working various part-time jobs where taxes were not withheld. He earned enough to owe a small amount of taxes. Like millions of other taxpayers, he e-filed his return. He was six days ahead of the April 18 deadline that year.
My son received an email saying his 2022 return was being processed. He thought he was in the clear.
Before the tax deadline, he failed to see a follow-up email stating that the IRS had rejected his return because of some minor error. He missed the message because of all the junk emails cluttering his inbox.
And despite the repeated reminders from his mama to always balance his bank account, he also hadn’t noticed that his payment to the IRS hadn’t been processed.
End of carousel
Fast-forward to the 2024 tax season. It wasn’t until he went to file his 2023 return that he realized he was in trouble. (By the way, he never received a letter from the IRS indicating he hadn’t filed.)
He quickly determined the amount he owed for the overdue return. Then came the bad news. Because his 2022 return was more than 60 days late, the minimum penalty was $450 or 100 percent of the tax on the return — whichever is less.
The penalties — filing his return after the due date, late payment, and interest on the past-due debt — totaled more than the taxes he owed, almost $500.
It was an expensive lesson for an innocent mistake.
If you missed the deadline to file on April 15 and owe the IRS, you will more than likely be penalized. Many people don’t realize that there are two penalties assessed when you fail to file on time and pay what is due.
The penalty for filing late is the bigger bite, usually 5 percent of the unpaid taxes for each month or part of a month that a return is late, up to a maximum of 25 percent of your unpaid taxes. The minimum penalty amount is adjusted for inflation every year. If your return is more than 60 days late, the minimum penalty will be $510 or the amount of any tax you owe, whichever is smaller, according to IRS Form 1040 for 2024.
The late payment penalty is usually one-half of 1 percent for each month or part of a month the tax remains unpaid, up to 25 percent.
Here are some other things to keep in mind.
You might be a taxpayer who has been given an automatic extension. The government typically extends the filing deadline for individuals and businesses in federally declared disaster areas, so check to see if that applies.
For instance, the IRS announced Monday that it was extending the time to file for individual taxpayers and businesses affected by recent severe storms and tornadoes in Arkansas and Tennessee. These taxpayers have until Nov. 3 to file and make tax payments.
A list of specific eligible localities and extended filing dates can be found on the IRS’s disaster relief page. Information for your state can be found on the agency’s “around the nation” page.
By the way, you are not penalized if you file late and the IRS owes you a refund. However, by law, taxpayers usually have three years from the typical April filing deadline to claim a refund. For the 2021 tax year, the IRS estimates over 1.1 million people nationwide had unclaimed refunds totaling more than $1 billion, with the median refund totaling $781.
If they missed this year’s April 15 deadline, their money becomes the property of the U.S. Treasury.
Filing an extension doesn’t mean you can delay payment. You were supposed to estimate your tax liability and pay what’s due by April 15 deadline.
You may think it’s better to wait to file to send the IRS all the money you owe at one time, but that’s unwise. You may be scared to still file because you owe, but request a payment agreement.
On the IRS homepage, click on the “Make a Payment” link for additional information about your options if you can’t pay your tax bill, including “Apply for a Payment Plan.”
You may qualify for an installment agreement to pay off your balance over time, including any penalty and interest.
As a tax preparer told me once, tax debt is not like wine. It doesn’t get better with age.
I know you need the money, but checking frequently won’t yield new information. Updates are made daily, usually overnight.
Your refund status typically appears around 24 hours after you e-file and four weeks after you file a paper return, according to the IRS.
