What to do if you missed the IRS’ April deadline

Taxes in the United States were due for most filers on Monday, 15 April. If you missed the deadline and did not file for an extension, take action as soon as possible to avoid incurring fees and other penalties.

Facing the fees

Unpaid taxes can carry high penalties, and federal law allows these fees to accumulate quickly. “The interest rate for an individual’s unpaid taxes is currently 8%, compounded daily,” reports the IRS. The penalty for filing late is around five percent per month, and the fee associated with paying late “is normally 0.5% per month, both of which max out at 25%.” We are now more than sixty days past the filing deadline, so an additional penalty will begin to be applied. The filer will either be required to pay 100 percent of the taxes they owe as a fee or $485, whichever is lower.

Establishing a payment plan

If you cannot pay, it is best to contact the IRS to see if you can establish a payment plan. There are both long-term and short-term payment plans that meet taxpayers’ diverse needs.

Another option the IRS recommends is filing your return, which you can do electronically and “explore various payment options available for the remaining balance.” A short-term payment plan is for those who owe “less than $100,000 in combined tax, penalties and interest,” with those enrolled being given up to 180 days to pay the IRS. For those who need a bit more time, the long-term payment plan is available to those who owe less than $50,000 and can be paid over the course of six years.

Next year, file an extension

You can apply for a free extension before the filing deadline, which will extend the deadline to October 15. However, these extensions can no longer be sought after the deadline. An extension can filed using one of the Free File software approved by the federal tax authority.