If you know you will file late, you can complete Form 4868 to request an extension. You Read this don’t need to give any reason for why you’re filing late—if you complete this form, you get an automatic extension until October 15 to file your taxes without the late-filing penalty.
However, keep in mind that even if you receive the extension, you’re still required to make tax payments on time—in other words, if you know you’re going to owe taxes, you still are required to pay what you owe (or an estimate) by the standard deadline. If you don’t, you may incur other penalties.
If you’re a business owner who’s required to make quarterly estimated tax payments, you should still make your estimated tax payments on schedule regardless of your extension request.
It’s important to note that regardless of whether you’re granted the extension or not, you’ll still owe all your taxes, plus interest. Interest can add up fast, particularly on large balances, so don’t delay paying what you expect to owe if you’re able.
If your tax software doesn’t calculate this automatically, the IRS will do the honors and tell you their estimate of how much you owe via an official letter through regular U.S. mail.
If you did not request an extension, or you miss the extension deadline
If you didn’t request an extension or filed your extension request late, you will most likely owe penalties plus interest if you owe taxes. The IRS charges as much as 10 times more to late filers who don’t complete the form for an automatic extension.
The late-filing, or Failure to File Penalty is five percent of your unpaid tax balance per month. The late-payment penalty is 0.5 percent per month. If that’s overwhelming, here’s some good news: you won’t necessarily have to pay the entire balance right away if you can’t afford to do so—more on that in a moment.
While you may have seen the IRS arrest tax evaders in the movies, that’s extremely unlikely to happen to a typical tax filer even if they are years late on paying their taxes. Because many people file taxes late, there are clear processes to guide you.
In the vast majority of cases, the worst thing that happens when you don’t file for an extension and file your taxes late is that you have to pay the taxes you already owed, plus interest and penalties.
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