This Is What the IRS Will Do If You File Your Taxes Late

The IRS has set April 15 as the standard tax filing deadline (sometimes a day or two later depending on the calendar and holidays), and the agency expects it to be met. While deadlines are designed to help us complete a task and keep us punctual, meeting the tax filing deadline can sometimes be harder for some.

This is especially true for those who have more complex situations or owe the IRS a lot of money. And so, some might decide to push off filing while others simply forget. But what are the consequences if you file your taxes late? We’re breaking it down in case this is your current situation and you’re not sure what to expect.

If you file your tax return late, meaning beyond the deadline date (typically April 15), or you file later than the extension date if you applied for and were given one, you may face a penalty from the IRS. Your penalty is determined based on how long you wait to file and the type of return you have. Once your return is filed, you can expect the IRS to mail you a notice informing you that you missed the deadline while also outlining the failure-to-file penalty amount.

For individuals and most business tax returns, such as those filing Form 1040 and Form 1120, the failure-to-file penalty is 5 percent of the tax due for each month (or partial month) your return is considered late. The “tax due” doesn’t include any tax you paid on time or credits available, as the IRS notes on its website. While the penalty accrues monthly, the maximum amount that can be charged is 25 percent.

Here’s how it works: for every month your tax return is late, you’re charged 5 percent of the taxes you owe. That means it stays at 5 percent per month of the original unpaid tax, meaning it does not increase to 10 percent, 15 percent, and so on. It continues accumulating until it reaches the 25 percent cap.

However, if your tax return is filed more than 60 days late, the IRS imposes a minimum penalty, and it varies based on the tax year. For example, returns filed after Dec. 31, 2025 are subject to a $525 minimum penalty if they are more than 60 days late (and tax is owed).

Once you file, the IRS will then compare the accrued 5 percent penalty to the minimum penalty, and you pay whichever amount is higher, plus any taxes you owe, of course.

The failure-to-file penalty also applies to partnership returns and S corporation returns, which follow different rules and have their own base penalty structures in place. You can view those amounts directly on the IRS website.

It’s also worth noting that if you don’t owe taxes and are expecting a refund, you typically won’t be subject to a late filing penalty, but waiting too long can put you at risk of losing your refund as they must be claimed within three years, per the IRS.