Missed the Tax Deadline? What You Should Do Now

Filing taxes late is not ideal, but it is not hopeless either. Missing the deadline can be costly, but quick action can minimize the damage.

Before you decide what to do next, you need to know where you stand. Are you facing a tax bill or waiting for a refund?

Do You Owe the IRS or Expect a Refund?

The answer to this question changes everything. Whether you owe taxes or are due a refund makes a big difference.

• If you are owed a refund: There is no penalty for filing late. However, you only have three years from the original deadline to claim it. After that, your refund is gone for good.
• If you owe taxes: Missing the deadline triggers immediate penalties and daily interest. They continue to grow until you pay in full. The longer you wait, the more expensive it gets.

Not sure if you owe? Check your latest W-2 or 1099. If too little tax was withheld, you will likely owe. If too much was withheld, you could be due for a refund.

What Happens If You Miss the Tax Deadline?

Once the deadlines pass, the IRS charges penalties and interest, even by a single day. In addition, interest accrues on your unpaid balance and compounds daily from April 15 until you pay the balance in full.

If you owe taxes and do not file on time, you will likely face two penalties:

1. Failure-to-file penalty: 5% of your unpaid taxes for each month (or part of a month) your return is late, up to a maximum of 25%.
2. Failure-to-pay penalty: 0.5% of your unpaid taxes for each month (or part of a month) the balance is not paid. This rate can increase to 1% after the IRS issues a final notice of intent to levy, but drops to 0.25% if you have an active installment agreement. The total late-payment penalty can also max out at 25%.

If you miss the filing and payment deadlines, both penalties apply simultaneously. That means your balance can grow by 5.5% in just the first month, even if you are only one day late.

On top of that, daily interest charges stack up. The IRS interest rate is reset quarterly and compounded daily. For the quarter beginning April 1, 2025, the interest rate on unpaid taxes is 7% per year.

If you do not owe taxes, penalties do not apply, but you still need to file to claim any refund (you should not miss the three-year deadline). 

Another hidden risk? Delayed future refunds. If you skip a return or consistently file late, the IRS may put a “delinquent return hold” on your account. This means they can delay future refunds until you file all missing returns. Staying current protects both your wallet today and your refunds tomorrow.

Missed Tax Deadline by One Day?

Yes, even one day late can trigger penalties if you owe taxes. The IRS does not offer a grace period, the clock starts ticking the moment the deadline passes.

But if you file quickly and have a clean history, you may qualify for penalty relief. The IRS offers a first-time abatement for those who have filed on time in the past three years and have not had any major issues.

So do not wait. Filing immediately could save you money and help you avoid further trouble. One day late is better than one month late.

Can You Still File After the Deadline? 

Yes, you absolutely can, and you should. The IRS does not block late returns. In fact, filing late puts you at risk of losing deductions, refunds, or else.

1. File electronically if possible: Electronic way is faster, reduces errors, and confirms receipt immediately. However, use trusted tax software. 

2. File by mail: Download the correct IRS forms, complete them carefully, and make sure to postmark your envelope by the deadline. It is best to send it via certified mail or another trackable method to prove timely filing.

Tax filing methods for free:

Depending on your income, you may be able to file your tax returns by yourself after the April 15 deadline. If your 2024 federal adjusted gross income was $84K or less, you can use the IRS Free File system until October 15. What about taxpayers with high income? If you are okay doing your taxes without guidance, you can also use the IRS Free File Fillable Forms until October 15.

What If You Missed the Tax Extension Deadline Too?

So the original deadline passed, and now the extension date has too. That does not mean you are out of options, but it does mean the IRS sees your return as officially late.  

At this point, the goal is to limit the damage and take back control. Here is what to do next:

1. File your return immediately: Even if it is late, getting it filed stops additional paperwork headaches. If you do not file, the IRS can create a substitute return on your behalf, but that version likely will not include your deductions, credits, or accurate income. This often leads to a higher tax bill and bigger penalties. Filing yourself, even late, gives you control and saves you money.
2. Do not wait to file just because you cannot pay: Many people assume it is better to wait until they have the full amount. That delay usually ends up costing more. Filing now puts you in a better position to request a payment plan or other relief.
3. Apply for a payment plan if you owe: The IRS offers installment agreements. You can apply online if your balance is under $50,000, or by mail if it is higher. 
4. Ask for penalty relief if you qualify: If this is your first time filing late, and you have a clean filing history for the past three years, you may be eligible for first-time penalty abatement. A one-time forgiveness that can erase your penalty.
5. You might have extra time to file and payment deadlines if you are directly impacted by storms and natural disasters in several states.
6. Americans living overseas and military personnel sometimes have later tax filing and payment deadlines.

What if You Cannot Pay Your Taxes?

The IRS offers a few options to help you avoid bigger problems:

• Short-term payment plan: If you owe less than $100,000 (including penalties and interest), you can apply online for up to 180 days to pay the full amount.
• Long-term payment plan (installment agreement): If you owe less than $50,000, you can set up a monthly payment plan online. Depending on your income, a setup fee may apply. If you cannot apply online, you can request an installment agreement by filing Form 9465.
• Offer in Compromise (OIC): In limited cases, the IRS may agree to settle your tax debt for less than you owe. To qualify, you must have filed all required tax returns and made any necessary estimated payments. The IRS usually accepts an OIC only if it believes it is unlikely to collect the full amount from you.
• Temporary delay (currently not collectible status): If paying your tax debt would leave you unable to cover basic living expenses, you can ask the IRS to temporarily pause collection efforts. Keep in mind: interest and penalties will still grow until the balance is paid.

No matter which option you choose, the IRS does not forgive the debt easily. The sooner you act, the more you can limit penalties, interest, and long-term damage.

Do Not Forget Your State Taxes

Each state sets its own rules, so check with your state tax agency for the exact penalties and deadlines that apply where you live. Some states impose higher penalties or have different amnesty programs. Acting quickly could reduce your state penalties as well. If your state collects income tax, your state return is usually due on April 15, just like your federal return.

Need Expert Help? Precision Tax Relief is Here

Life happens. If you missed the tax deadline, do not assume it is too late to fix it. Filing late can dramatically reduce your penalties, protect your refunds, and show the IRS that you are trying to stay compliant.

In the eyes of the IRS, filing something, even late, is always better than doing nothing.

The longer you wait, the harder (and more expensive) it gets.

Act now! Your future self will thank you.