Here's What Happens When You Don't File Your Taxes on Time

This year, taxes are due on April 15. So if you haven't begun to work on your 2023 return yet, don't panic -- there's still ample time to get the job done by the deadline.

However, you may still end up being late with your tax return this year due to a variety of reasons. And if so, you may be wondering what the consequences will look like. The answer is, it depends on whether you owe the IRS money or are due a refund.

When you're due a tax refund

When the IRS owes you money and you're late filing taxes, nothing happens. The reason there's no penalty is that the IRS simply gets to hang onto your money a bit longer. Unsurprisingly, the agency doesn't mind doing that.

It pays to be timely with your tax return so you get your tax refund in a timely manner. But if you need an extra couple of weeks to get the job done, it's not the end of the world -- especially if you're managing OK financially without your refund check.

When you owe the IRS money

If you owe money on your 2023 taxes and don't submit your return by April 15, the IRS can slap you with a big penalty. The failure-to-file penalty equals 5% of the sum you owe for each month or partial month your return is late, up to a total of 25%.

Let's say you owe the IRS $1,000 from 2023 and you file your taxes two weeks late this year. That means you'll have to pay an extra $50. If your tax return is six weeks late, you'll pay a penalty of $100 -- $50 for the first month you're late and another $50 for the partial month you're late.

Request an extension if you don't think you'll be on time

If you're not sure whether you'll owe the IRS money from 2023 or get a refund, and you really don't think you can get your taxes done by April 15, then your best bet is to request a tax extension by the filing deadline. That automatically gives you an extra six months to submit your return without incurring a failure-to-file penalty.

To be clear, though, a tax extension will not give you extra time to pay your tax bill. So let's say you owe the IRS $1,000, you get an extension, and you file your tax return on May 15. In that case, you won't be charged the aforementioned $100 for failing to file on time. But you will be charged interest and penalties (different penalties than the failure-to-file penalty) for paying that sum four weeks after you were supposed to.

Meanwhile, if you're planning to intentionally file your taxes late because you owe the IRS money and don't have the cash in savings to pay up right away, don't do that. All you'll do is incur penalties for no good reason.

Instead, submit your tax return on April 15 and contact the IRS about getting onto a payment plan that has you paying off your tax bill over time. There are different options that may be available to you depending on the sum you owe.