Missed the Tax Deadline? Here's What to Do

The key is to act quickly.

Normally, taxes are due on April 15. This year, filers got a few more days to submit their returns. Because Emancipation Day, a Washington, D.C. holiday, was observed this year on April 15, tax filers got until April 18 to get their returns completed.

But what if April 18 has come and gone, and your tax return still isn't done? Missing the tax-filing deadline isn't necessarily something to panic over. But it's also important you take action quickly once that happens.

When you don't owe money on your taxes

If you're due a refund from the IRS and you miss the tax-filing deadline, you can breathe easy -- nothing bad will happen. The only consequence of being late in this scenario is having to wait longer for your refund to hit your bank account.

But that's not something the IRS will penalize you for, because if anything, it means the government gets to hang onto your money a little bit longer. It's when you owe the IRS money and are late with your return that the situation becomes trickier.

When you owe money on your taxes

If you missed the April 18 tax-filing deadline and owe the IRS money from 2021, your best bet is to file your return as soon as possible, and pay your tax bill as soon as possible. When you owe money and are late with a tax return, two penalties come into play.

The first is the failure-to-file penalty, which applies when your return itself is late. That penalty is equal to 5% of your unpaid tax bill for each month or partial month your return is late, up to a total penalty of 25%. This means if you owe the IRS $1,000 and are three weeks late with your tax return, you'll be assessed a penalty of 5% of $1,000, or $50.

The second penalty you'll have to deal with is the late payment penalty. That penalty is worth 0.5% of your unpaid tax bill for each month or partial month your return is late, up to a total of 25%. So in this example, that penalty would cost you $5 if you're three weeks late in paying your tax bill.

Either way, the sooner you get your tax return done and pay your bill after being late, the less of a total penalty you'll rack up. If you can't pay your tax bill in full, you can ask the IRS to put you on an installment plan. That won't get you out of penalties for being late, but it'll make it so the IRS doesn't attempt to garnish your wages to get repaid. But definitely make sure to at least submit your tax return, because the failure-to-file penalty is much larger on a monthly basis than the late payment penalty.

Be aware of your right to an extension

If you miss the tax-filing deadline without realizing it, your best bet is to submit your return as soon as you can. In the future, if you realize ahead of time that you're likely going to be late, be sure to request a tax extension by the filing deadline. That will give you six more months to complete your return.

If you ask for an extension and don't get your return completed by the deadline, the late payment penalty will still apply to any unpaid taxes of yours from the current tax year. But you won't be charged the more costly failure-to-file penalty as long as that extension request is in on time.

Best of all, you don't need a specific reason to be granted an extension. The IRS doesn't care if you need more time to file because certain tax forms got delayed or because you just plain procrastinated. So in that regard, you get a little leeway as long as you recognize in advance that completing your return by the tax-filing deadline probably isn't in the cards.