What happens if you miss the tax deadline?
The deadline for filing taxes has arrived.
If you are in panic mode because you won’t be able to file your tax return on the April 15 deadline, the Internal Revenue Service has guidance on what to do next.
More than 88 million tax returns had already been filed by March 27, with 63 million people receiving refunds that have averaged $3,521, according to a report from the IRS.
Here are tips on how to proceed as well as possible penalties for not filing on time.
What is the tax deadline and what time do I need to file by?
The deadline to file your taxes is April 25 at midnight your local time. If filing by mail, it must be post-marked on April 15.
What can you do if you can’t file or pay your taxes by the April 15 deadline?
The IRS has tips for those who are filing late or can’t pay their tax on time.
Apply for an extension of time to file
If you need more time to prepare your tax return, apply for an extension of time to file. Just note: This does not extend your time to pay, only for filing your return.
You can work out a payment plan with the IRS to pay over time.
Pay the tax bill that arrives in the summer
The IRS may send you a bill this summer for late taxes and any penalties and interest accrued. The agency advises you to pay it in full at that time even if it means securing a loan to pay it off, instead of paying the IRS in installments. Payments can be made with a debit or credit card, or by electronic funds transfer, check, money order, cashier’s check or cash.
Get additional time to pay
You could potentially be granted more time to pay your tax bill in full depending on your circumstances. You can request extra time to pay through the Online Payment Agreement application or by calling the IRS at 1-800-829-1040.
Request a payment plan or installment agreement
If you can’t pay your bill in full, you can request an agreement with the IRS in which you will pay the amount in installments. However, you have to first file your tax returns and be current on any estimated tax payments.
If you owe $50,000 or less, including penalties and interest, you could qualify for a long-term payment plan where you pay montly, according to the IRS. If you owe $100,000 or less, you could qualify for a short-term payment plan where you pay in 180 days.
Short-term payment plans do not have a set-up fee, but penalties and interest accrue until the balance is paid. Long-term payment plans are $22 to set up automatic payments (this fee is waived for low-income status) and $69 for non-direct payments ($43 for low-income status). Penalties and interest accrue for long-term plans, too.
People interested can learn more here.
Is there a penalty if you fail to file or fail to pay?
If you haven’t filed your taxes or paid your taxes by April 15 and have not been granted an extension, you can incur a failure to file penalty.
For individuals and most businesses, the failure to file penalty is 5% of the tax due for every month or partial month that your return is late, according to the IRS. That penalty does multiply each month to a maximum of 25%.
If the filing is more than 60 days late, the minimum penalty is 100% of the underpayment, or other minimums set by the IRS, which can be more than $500.
Failure to pay penalty is 0.5% of the unpaid taxes for each month or partial month that the tax is unpaid. The penalty won’t exceed 25% of unpaid taxes, according to the IRS.
How will you know if you owe a penalty for filing late?
The IRS may send you a notice or a letter informing you that you have a balance due, if it has a question about your return or if it is notifying you of other information.
If you’d like to report a disagreement, the IRS instructs you to follow the instructions on the notice to dispute what it says.
This story first appeared on TODAY.com. More from TODAY:
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