Let me first relieve a few tax filers from panic; if you are owed a refund, the IRS doesn’t asses penalties when a taxpayer is owed a refund. Also, the taxpayer won’t necessarily lose their potential refund since they actually have until April 15 2018 to claim back tax refunds for the 2014 tax year.
If you do owe additional taxes, the best advice is to file your federal 1040 and state returns as soon as you can; even if you can’t pay your tax bill right away. The late-filing penalty is up to 10 times higher than the late payment penalty, and the longer you wait the worse it gets.
Penalties for Filing Late
– There is no penalty if you’re getting a refund, provided you file within the allotted 3 year time frame.
– After 3 years, the “penalty” is forfeiture of your tax refund.
– There is no penalty if you filed an extension and paid any additional taxes owed by April 15th
– A late filing penalty applies if you owe taxes and didn’t file your return or extension by April 15th
– This penalty also applies if you owe taxes, filed an extension, but didn’t file your return by October 15th
– The late filing penalty is 5% of the additional taxes owed amount for every month (or fraction thereof) your return is late, up the a maximum of 25%
– A late payment penalty applies if you didn’t pay additional taxes owed by April 15th, whether you filed an extension or not
– The late payment penalty is 0.5% of the additional tax owed amount for every month (or fraction thereof) the owed tax remains unpaid, up to a maximum of 25%
For more information on Penalties, check out my blog – IRS Penalties for Filing Past The Income Tax Return Deadline
Risks of Not Filing At All
Taxpayers who fail to file will likely receive a letter from the IRS reminding them, especially if they are a wage earner who receives a Form W-3 or a contractor who receives Form 1099, because these are reported to the IRS by employers and businesses.
U.S. citizens and resident aliens who are out of the country on the April filing deadline are automatically given two extra months to file a return and pay any taxes due without incurring the late-filing or late-payment penalty.
The ExpressExtension team would highly recommend contacting the IRS with any questions you have about filing past the deadline, and try to be kind when calling the IRS. People are much more willing to help you out when you treat them like you would like to be treated.