What happens when you do taxes late

The deadline to file a tax return has come and gone. Did you miss it? Depending on your situation that could be cause for an “oops” or it could mean you need to take action ASAP to avoid owing any more to the IRS.

If you missed the tax deadline but are due a refund there is no penalty. The government is happy to hold on to your money, interest-free, for a bit longer. In fact, you have up to three years from the filing deadline to complete a return and get that refund.

Don’t delay too long though. This is especially true if you get a Premium Tax Credit to help pay for insurance. Failure to file a tax return could jeopardize that credit, so it’s better to act soon. You can still make an appointment at an H&R Block office or start online.

If you owe taxes and missed the deadline, there’s good news and bad news.

Bad news: You can’t file an extension at this point.

More bad news: you will be charged failure-to-file and failure-to-pay penalties for missing the deadline.

Good news: You can still file.

Ok, that might not seem like great news. How about this: The sooner you file, the less you’ll pay in penalties.

Read more about exactly how those penalties are calculated. Generally, the IRS charges them on a monthly basis, but they can be prorated for a portion of a month. So it’s a good idea to file as soon as possible to limit the charges you may incur. After 60 days pass, you will incur an established minimum penalty that is the lesser of $205 or 100% of the unpaid tax you owe.

So there is a simple solution: Get that tax return filed and make it a priority now. Learn more about how to file back tax returns and how to reduce penalties and interest if you qualify. Get help from a trusted IRS expert.

Start filing online for free.

Out of more than 143 million taxpayers, you may think the IRS has enough to worry about and won't notice if you pay your taxes late or fail to pay at all.

But no matter how busy the IRS gets during tax season, you will be penalized if you don't pay taxes. Interest and penalties will begin to accrue on the outstanding amounts when you don't pay what you owe by the due date.

So if you anticipate not having your taxes done on time, here's what could possibly happen.

What happens if you don't file your taxes on time

If a significant amount of time passes since the tax deadline, and you owe the IRS money, it could potentially seize a portion of your wages until the debt is settled.

If you're expecting a refund, you risk losing the money the government owes you. Taxpayers must file within three years of the return due date, or else they forfeit any cash the IRS owes them. The same rule applies to claim tax credits such as the Earned Income Credit (EIC).

In 2022, the deadline to file your 2021 taxes is Apr. 18. If you haven't already filed, you should e-file today using an online tax filing program like TurboTax or H&R Block.

If you're concerned your tax bill may be steep, you can set up a payment plan with the IRS. The service fees for setting up tax payment plans range from $0 to $149 and will include interest on the balance until the payment is paid in full. Plus, there is a non-payment penalty, up to a maximum of 25% of the unpaid tax amount, for paying late. You can learn more about IRS payment plans on its website.

Other options to pay your taxes over time

Bottom line

Paying your taxes on time is an essential part of keeping your personal finances in a healthy spot. Avoiding paying taxes can put you in a tough bind, and worst case scenario, end up in criminal charges.

So before the Apr. 18 deadline approaches this year, be sure to file your taxes on time, and if needed — file for an extension.

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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.