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The 2025 tax season is in its final stretch and the deadline to file your federal return is Tuesday, April 15. While many taxpayers have already complied, others are still putting off the process, not considering the consequences of a possible delay.
The Internal Revenue Service (IRS) penalties for late filing depend on whether you owe money or are expecting a refund. If you are in the latter case, there is no penalty, but you will receive the refund late. However, you have up to three years to claim it before you lose it.
However, if you have taxes outstanding, the picture changes. The IRS imposes a 5% monthly late filing penalty on the amount owed. And beware: for the IRS, a month late can be just one day out of time. This is in addition to a 0.5% monthly penalty for late payment. Together, you could face a surcharge of up to 25% of the total if the delay is prolonged.
In addition to penalties, the IRS charges interest on the unpaid amount, currently at an annual rate of 7%.
"The date we start charging interest varies by penalty type. Interest increases the amount owed until you pay your balance in full," IRS reports on its website
Types of fines for late filing or payment
The fines applied by the IRS can be for late filing after the April 15 deadline and there is a tax liability, also for not filing before October 15 if an extension was requested.
According to Turbo Tax, the late filing penalty is 5% of the amount of additional taxes owed for each month and can be a maximum of 25%.
If you took more than 60 days to file the return, the minimum penalty is $510, although it can also be 100% of the unpaid tax, whichever is less.
Late payment penalties are 0.5% of the tax amount for each month it remains unpaid and up to a maximum of 25%.
In some cases, you can request an extension if you live abroad, were affected by a natural disaster or simply need more time. However, the extension only applies to filing the return, not to paying, so interest and penalties will still apply from the original due date.
The IRS offers free resources to make the process easier on its "Let us help you" portal, and if you prefer professional help, there are certified ants across the country ready to assist you, although this may involve an additional expense.
In summary, if you have not filed your return and owe money to the IRS, it is best to act as soon as possible. The longer you wait, the greater the financial consequences.