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It happens to the best of us. You think you've got so much time left to file your 1040 — and then Tax Day comes and goes. And there you are, without having checked off this yearly to-do.
So what happens if you send in your tax return late? Here's what to know.
Better Late Than Never
Having said that, less late is better than more late. So file your return by the next day or as soon as you can. If you’re having trouble completing that return and make $66,000 or less per year, you can get free filing software.
No Punishment — If You’re Getting a Refund
If the IRS owes you money, the only consequence of filing late is that you’ll get your refund late. In fact, you can still get a refund if you file up to three years late. (Please note, we don't recommend this.)
But If You Owe Taxes, You’ll Also Owe Penalty and Interest
How much depends on how much you owe Uncle Sam. The penalty for filing late is 5% of whatever you owe per month that you’re late. A portion of a month counts as an entire month, by the way, so filing your return even one day late will incur the penalty. In addition, you’ll have to pay interest at a rate that varies with the market (though it's probably lower than a typical credit card).
Will They Really Notice?
The IRS gets millions of tax returns until the eleventh hour, so will they really notice that yours is a day late?
All we can tell you is that they say they’ll notice, so why chance it? And if you send your returns in by mail, they hang onto the envelope you send them in for this very reason. So don’t be surprised if you get an IRS bill for a relatively small sum because you're a few days past due.
Next year, if you’re going to be late (even by a day!), make sure to file for an automatic extension. You'll still have to fill out and file as much of your 1040 as you can now, but you'll get until mid October to pay taxes.