What Happens If You Miss the October 15, 2024 Tax Extension Deadline?

At a Glance

• October 15, 2024: Final deadline for filing your 2023 tax return if you filed an extension.
• Late Filing Penalty: 5% of unpaid taxes per month if you miss the filing deadline.
• Late Payment Penalty: 0.5% of unpaid taxes per month if you didn’t pay by April 15, 2024.
• Interest: Compounded daily on unpaid taxes, starting from April 16, 2024.
• No Penalty: If you're owed a refund or paid your taxes on time.
• Correcting a Rejected Return: You have until October 20, 2024, to resubmit after rejection.
• No Further Extensions: October 15 is the final deadline; no more extensions are available.

Introduction

Missing tax deadlines can have costly consequences, but understanding how IRS penalties work can help you manage or avoid these charges. Whether you're struggling with a missed filing deadline, late payments, or a rejected return, this article breaks down key penalties, how they’re calculated, and what you can do if you're behind.

In this guide, we’ll explain the impact of missing the October 15, 2024, tax extension deadline and explore your options for late filings and payments. By staying informed, you can reduce penalties and get back on track with the IRS.

Missing tax deadlines can lead to various IRS penalties, depending on whether you owe taxes and how late your filing and payments are. Here's a breakdown of the key deadlines, potential penalties, and what options you have if you're late filing your taxes.

Does the October 15, 2024 Tax Extension Apply to You?

If you requested an extension before the April 15, 2024 deadline, the extension gives you until October 15, 2024, to file your return. However, if you didn’t file an extension or submit your return by the original April deadline, you're already at risk of penalties.

What Penalties Do You Face for Missing the October Deadline?

Late Filing Penalty

If you owe taxes and miss the October 15 deadline, you’ll incur a late filing penalty. This is typically 5% of the unpaid taxes for each month (or part of a month) your return is late, capped at 25%.

Late Payment Penalty

Even if you filed for an extension, any unpaid taxes were due by April 15, 2024. A late payment penalty of 0.5% of the unpaid taxes is applied for each month (or part of a month) the taxes remain unpaid, up to 25%.

Interest on Unpaid Taxes

Interest, compounded daily, starts accruing on any unpaid taxes from April 16, 2024, until the balance is paid in full.

Penalty Calculation Example

Here’s how the IRS calculates penalties for late filings and payments, illustrated with an example.

Example: Let’s say you owe the IRS $1,000 for 2023 taxes.

• Scenario 1: You filed an extension by April 15, 2024, but paid your $1,000 tax bill 10 days late on April 25th. The IRS applies a late payment penalty of 0.5% on the unpaid amount, which in this case is $5 (0.5% of $1,000). Additionally, you’d owe a small amount in interest, say around $1, for those 10 days.
• Scenario 2: You missed both the April 15 deadline and didn’t file for an extension, submitting your return 10 days late on April 25th. Since no extension was filed, the IRS applies a late filing penalty of 5%, which results in a $50 penalty (5% of $1,000). You would also owe a small amount in interest, around $1.

This example shows how much more costly it is to miss the filing deadline compared to missing only the payment deadline.

Different Scenarios You Might Be In

What If I Submitted My Return Before October 15, But It Was Rejected?

If your return was submitted before October 15th but rejected, you usually have until October 20th, 2024, to fix and resubmit it. If you miss this resubmission deadline, you could still have until November 15th, 2024, to e-file your corrected return. Failing to meet these deadlines may result in penalties as if you hadn’t filed by October 15th.

What If I Got an Extension but Didn’t Pay My Taxes?

Filing an extension only postpones your return submission deadline, not your payment due date. If you didn’t pay what you owed by April 15th, 2024, you’re subject to late payment penalties and interest.

Can You Apply for Another Extension?

No, the IRS does not grant extensions beyond October 15th. If you miss this deadline, penalties start accruing immediately.

How the IRS Calculates Penalties

Penalties for late filing are 5% of unpaid taxes per month, while late payment penalties are 0.5% per month. Interest on unpaid taxes is compounded daily, further increasing your tax bill the longer it remains unpaid.

Are There Exceptions to IRS Penalties?

You won’t face late filing penalties if you're owed a refund. However, you still need to file your return to claim it. Additionally, both the late filing and late payment penalties are capped at 25% of the unpaid taxes.

What Are Your Options If You Still Need to File?

1. File immediately: The sooner you file, the lower your penalties and interest.
2. Set up a payment plan: If you owe taxes but can’t pay in full, setting up a payment plan can help you avoid more penalties.
3. Seek professional help: A tax professional can assist in navigating penalties and finding solutions for late filings.

Will You Owe Both Late Filing and Late Payment Penalties?

If you owe taxes and missed both the filing and payment deadlines, you may owe both penalties. These penalties can accumulate until you pay what you owe, though both are capped at 25%.

How Long Can You Claim a Refund?

If you’re due a refund, you have until April 15th, 2027, to file your return and claim it. There’s no penalty for late filing in this case, but it’s best to file soon to get your money back.

By understanding the deadlines and penalties, you can take action to avoid additional costs and reduce your financial burden with the IRS.

Can I Still File for Previous Years?

If you’ve missed the tax filing deadlines for previous years, you can still file late returns. However, penalties will apply based on how late the filing is, and interest on any unpaid taxes will continue to accrue. Importantly, it’s never too late to file a tax return for previous years, but there are limitations on when you can claim refunds.

Below is a summary of key deadlines and penalties for filing missed returns from previous years:

*The 2019 tax deadline was extended to July 15 due to the COVID-19 pandemic.

Is It Ever Too Late to File?

It’s never too late to submit a late tax return, even for years further in the past. However, if you are owed a refund, the IRS has a three-year statute of limitations. This means that after three years from the original filing deadline, you lose the right to claim a refund. For instance, the deadline to claim a refund for 2019 taxes passed on July 15, 2023.

If you owe taxes, the IRS still requires you to file the return and pay your liability. Penalties and interest will apply based on the original due date of the return.

Conclusion

Missing tax deadlines can lead to significant penalties, but it’s important to understand how these penalties work and what actions you can take. Filing as soon as possible, paying off your tax liability, and setting up a payment plan if needed can help reduce the financial impact. Always aim to meet deadlines, but if you find yourself behind, take action immediately to minimize further costs.

FAQ

1. What happens if I miss my tax deadline?
   If you miss your tax filing deadline and owe taxes, you'll face late filing penalties of 5% per month (up to 25%) and interest. If you're owed a refund, no penalties apply.
2. Do you pay interest if you file an extension?
   Yes, even with a tax extension, any unpaid taxes are subject to interest, which starts accruing from the original tax deadline (April 15, 2024).
3. Is there a penalty for filing a late tax extension?
   There’s no direct penalty for filing a tax extension late, but if you don’t file an extension or miss the final October 15 deadline, late filing penalties may apply.
4. What happens if you forget to file a tax extension?
   If you forget to file an extension by April 15, 2024, and fail to file your return by the same date, you’ll incur both late filing and late payment penalties.
5. Can I file a tax extension without paying?
   Yes, you can file a tax extension without paying, but any unpaid taxes after April 15, 2024, will accrue a 0.5% penalty per month and interest.
6. Does getting a tax extension hurt your credit?
   No, getting a tax extension does not affect your credit. Tax filings are not reported to credit agencies.
7. How do I avoid tax extension penalties?
   To avoid penalties, file your return by October 15th, 2024, if you received an extension, and pay any taxes owed by the original April 15 deadline.
8. Is it problematic to repeatedly file a tax extension?
   Filing a tax extension is a common practice. It gives you more time to file, but you must still pay any owed taxes by the April deadline to avoid penalties.