Tax season is much later than usual this year. In March, the IRS announced that the federal tax filing deadline, which is typically in mid-April, would be pushed to July 15, 2020.
The move, made in response to the coronavirus pandemic, gave Americans an extra three months to file their 2019 returns without incurring interest or penalties.
Today marks the new deadline, and if you don’t file and pay your taxes, you could face some financial consequences.
There are different penalties for not filing your taxes versus not paying them:
- If you don’t file, you could face a failure-to-file penalty. The penalty is 5% of your unpaid taxes for each month your tax return is late, up to five months. If you file more than 60 days late, you’ll pay whatever is less: a minimum of 100% of the taxes you owe or “a specific dollar amount that is adjusted annually for inflation,” explains the IRS. The specific dollar amount is $435 for returns due on or after January 1, 2020. (Note that, in addition to the failure-to-file penalty, you’ll also have to pay all of the taxes you owe.)
Even if you can’t pay your taxes, be sure to file. In most cases, the failure-to-file penalty is greater than the failure-to-pay penalty. And you can always apply for a payment plan with the IRS to resolve your tax debt.
If you’re owed a refund and file late there are no penalties, but you should still file as soon as you can so the IRS doesn’t keep your money.
If you won’t have time to file your taxes today, you can file for an extension. Anyone can use Free File to electronically request a tax-filing extension, which would give you until October 15, 2020, to file your return, according to the IRS. (That’s the same extended filing deadline as prior years.)
Note that an extension to file is not the same as an extension to pay. If you’re filing an extension, you still need to estimate any taxes you may owe and pay them by today to avoid possible penalties.
“After July 15, you will begin accruing late payment penalties for any amount you owe,” says Kevin Martin, principal tax research analyst at The Tax Institute at H&R Block. “Taxpayers should make an estimated payment with their request for extension to avoid late payment penalties if they expect to owe money.”
You can use a free tax estimate calculator to help you figure out how much you may owe.
If you continually ignore your taxes, you may have more than fees to deal with. The IRS could: