If the applicable filing deadline has passed without a valid extension or postponement, file an accurate return as soon as possible and pay what you can. Form 4868 generally must be requested by the filing deadline and does not extend payment time.
Time Extensions and Special Considerations
For most calendar-year individual filers, the federal filing deadline is normally April 15, with adjustments for weekends and legal holidays. Eligibility for disaster or other special relief depends on the IRS notice, covered taxpayer, location, tax period and action. Check the applicable notice rather than assuming that historical relief for Maine, Massachusetts, Washington, D.C., or people affected by the October 7 attacks in Israel applies to your return.
If the applicable deadline has passed without a valid extension or postponement, file an accurate return as soon as possible and pay what you can. Form 4868 generally must be submitted by the filing deadline; it extends filing time, not the payment deadline.
Estimating Your Tax Payment
Estimate any balance using the applicable IRS forms, income, deductions, credits and payments for the relevant tax year. A fixed percentage of gross income is not a reliable substitute for that calculation.
Do not use 20% or 30% of gross income, or a $200,000 income cutoff, as a substitute for calculating your tax. For individual estimated payments, use the applicable Form 1040-ES worksheet and review the payment periods, withholding, prior-year tax, current-year tax and any special rules that apply.
Penalties for Non-Compliance
For individual income-tax returns, the failure-to-file penalty generally equals 5% of unpaid tax for each month or part of a month the return is late, up to 25%, subject to exceptions and a minimum penalty when a return is more than 60 days late. The failure-to-pay penalty generally starts at 0.5% per month or part of a month, up to 25%; its rate can change in specified circumstances. Other return types can have different rules, and penalty relief may be available.
When both standard penalties apply for the same month, the failure-to-file amount is reduced by the failure-to-pay amount, generally producing a combined 5% for that month. The failure-to-pay penalty can continue after the failure-to-file penalty reaches its limit. Interest also generally accrues on unpaid tax and may apply to penalties; paying what you can reduces the unpaid balance.
Options for Those Unable to Pay in Full
An IRS payment plan can allow payment over time if you qualify. Interest and applicable penalties generally continue until payment in full, and a setup fee may apply. Some taxpayers qualify for a reduced failure-to-pay rate during an approved installment agreement. An enrolled agent, CPA, or tax attorney can help assess available options, especially for larger or more complex debts.
Special Note for Independent Contractors
Gig workers, freelancers and sole proprietors should file and pay by their applicable deadlines. Estimated tax payments may be required during the year. Late or insufficient estimated payments can cause an underpayment penalty even when the annual return and balance are timely or a refund is due. Review the applicable safe harbors, exceptions and payment periods.
Late Filers Expecting Refunds
An individual income-tax return showing no unpaid tax generally does not generate a failure-to-file penalty. Refund claims are generally due within 3 years after filing the return or 2 years after paying the tax, whichever is later; separate lookback rules limit the amount recoverable. Withholding and estimated payments are generally treated as paid on the original return due date, so filing late can cause a refund to be lost. Extensions and statutory exceptions may affect the calculation; check the rules for your tax year promptly.
Taking these steps will help you navigate the consequences of missing the tax deadline and put you in a better position for the current and future tax seasons.
Need Help with Filing or Settling Back Taxes?
Contact Segal, Cohen & Landis (SCL) about your back taxes to discuss your circumstances and potential resolution options. The appropriate response depends on your records, deadlines and applicable law.
Call (310) 285-3999 to discuss a consultation with a tax attorney. Confirm availability, fees and the scope of any representation directly with the firm.
Have questions about this topic? Talk to an IRS attorney today.
Segal, Cohen & Landis, P.C. — Beverly Hills. Serving clients nationwide.
Samuel Landis, Esq.
LL.M. (Tax) · Selected to Super Lawyers®
Sam Landis is a Beverly Hills IRS tax attorney specializing in IRS collection defense, audit representation, and international tax compliance for foreign nationals and US expats.