What Happens If You Don’t File Taxes, or File Taxes Late?
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If you owe taxes and didn't file your federal income tax return by the tax deadline, there may be consequences in the form of IRS penalties and interest.
What happens if you file late but don't owe anything?
There is usually no penalty for filing your tax return late if you're owed a refund. But if you're required to file by law, you should still plan to submit your return as soon as possible.
Also keep in mind that you typically have just three years to claim any tax refunds due to you. This means that if you didn't file your tax return in 2022 but think you were due a refund, you only have until 2025 to file a tax return for that year to claim it.
What happens if you file late and owe taxes?
Failure-to-file penalty
The late-filing penalty — also known as the failure-to-file penalty — affects people who owe taxes and don’t turn in their Form 1040 and other important tax documents on time. The penalty is usually 5% of the tax owed for each month or part of a month the return is late, up to 25% of your bill.
If your return is more than 60 days late, the minimum penalty for not filing taxes 2024 taxes by the 2025 filing deadline is $510 or the entire amount of tax owed, whichever is smaller. The late-filing penalty maxes out after five months of your return being late, but other penalties and interest may continue to accrue.
Late-payment penalty
The late-payment penalty, on the other hand, is a fee that's issued if you fail to pay your tax bill by the deadline. The IRS could hit you with both a late-filing penalty and a late-payment penalty if your bill and return are both overdue.
The penalty for failing to pay your taxes on time is 0.5% of your unpaid bill for each month your outstanding taxes are unpaid, up to 25% of your outstanding bill plus interest.
If both the failure-to-file and the failure-to-pay penalties are issued in the same month, the late-filing penalty is reduced by the amount of the late-payment penalty for that month, so you'd pay a combined fee of 5% for each month (or partial month) your return is late.
Some late filers may be eligible for tax relief in the form of a penalty abatement if they meet certain conditions. For example, you might be eligible for penalty relief if you have a reasonable explanation for filing late or if this is your first time missing the deadline.
How to avoid a penalty for filing taxes late
A tax extension can get you an extra six months to finish your tax return, but the deadline to request one was April 15.
If you did get an extension, remember that it only gives you more time to file your tax return, not more time to pay your taxes. You were still required to submit an estimated tax payment by that original April 15 deadline. Otherwise, anything you owe past the tax deadline might be subject to that late-payment penalty and interest.
Some people, such as victims of natural disasters, certain members of the military or Americans living overseas, may automatically get more time to file. Remember to keep an eye on the calendar for the Oct. 15 extension deadline — if you miss it, that failure-to-file penalty could come back to haunt you.
If you missed the tax deadline, the IRS recommends you file and pay as soon as possible. Doing so can reduce any fees and interest you'll pay on your tax bill.
How long can you go without filing taxes?
While the government usually has just six years to charge you with criminal tax evasion, it has forever to collect the taxes you owe and assess penalties. In addition to the failure-to-file and late-payment penalties, these things could happen to you when the IRS catches up:
Interest: On top of penalties, interest accrues on your unpaid taxes.
A substitute return: If you fail to file but the IRS has some information needed to calculate your taxes, such as your W-2 form, you may be notified by mail that it has filed a return on your behalf. It won’t consider the tax credits, deductions or other tax breaks you may have taken if you’d done your taxes.
Lost refunds: You may be missing out on money you’re owed. In most cases, you get a three-year window to file previous years’ returns. Once this window closes, you forfeit your tax refund.
» MORE: How to file back taxes
