File Your 2020 Tax Returns Now To Avoid Penalties: Oct. 15 Is the Final Deadline

Each year, the tax filing date is usually April 15. The deadline for submitting might be extended until Oct. 15 without penalty, but the taxes are still due by April 15. Failure to file on time can occur due to a variety of reasons, ranging from simple forgetfulness to unforeseen emergencies.

There are potential consequences, regardless of what causes an individual to miss the tax filing deadline. Here’s what happens if you miss the October 15 tax extension deadline.

If you didn’t request an extension or didn’t file by the extended deadline, you will begin to face penalties. The IRS may levy a late-filing penalty of 5 percent on any unpaid taxes for each month your tax return is late. The maximum penalty is 25 percent of the amount due.

The government will forgive late-filing penalties in certain circumstances, such as natural disasters and military service. However, unless you qualify for one of the exclusions, you'll be required to pay the penalty. The IRS has the authority to recommend jail time for those who fail to submit their taxes, although such cases are rare.

If you’re self-employed or don’t have any money withheld from your paycheck, you will most certainly owe money to the government when you file your taxes. This implies that if you don't submit your taxes by April 15, you might face penalties if you owe the government money.

Filing for a tax extension might help you avoid some of these fines. This gives you an extra six months to submit your taxes, while delaying some of the penalties for failure to file that you may otherwise face. Tax extension prevents the government from penalizing you for failing to file on time.

Regardless of when you file, your tax payment is due on April 15. If you didn’t make your payment on time, you might face penalties and interest.

The IRS usually charges a late-payment penalty of 0.5 percent of the outstanding tax every month that has not been paid by the filing date. This will continue every month, maxing out at 25 percent of your total unpaid tax amount. There's also interest due on any unpaid taxes, and that starts accruing the first day you don't pay your taxes and accumulates daily until the amount is paid in full.

If you owe no taxes to the government or are due a tax refund, there's no penalty for failing to file your taxes. However, you won’t get your tax refund until you submit your taxes. Technically, you have three years to file your taxes and obtain a refund. Unclaimed funds, on the other hand, return to the Treasury Department after three years. An estimated 1.3 million taxpayers are on the verge of losing their 2017 tax refunds if they don't submit a return this year.