What happens if you mail your tax return late

If you mail your tax return late, you may face penalties and interest on the amount you owe. Here's what can happen:

  1. Penalties: The IRS charges a late filing penalty, which is 5% of the unpaid taxes for each month or part of a month that the return is late, up to a maximum of 25%. This penalty is in addition to any interest that accrues on the unpaid taxes.
  2. Interest: The IRS also charges interest on the unpaid taxes, which is calculated daily. The interest rate is currently 5% per year, compounded daily.
  3. Additional penalties: If you owe taxes and don't file your return on time, you may also face additional penalties, such as:
    • A minimum penalty of $205 for individual taxpayers (or $1,020 for businesses) if you owe $1,000 or more in taxes.
    • A penalty of 0.5% of the unpaid taxes for each month or part of a month that the return is late, up to a maximum of 25%.
  4. Worst-case scenario: If you don't file your return at all, you may face even more severe penalties, including:
    • A penalty of 10% of the unpaid taxes for each month or part of a month that the return is late, up to a maximum of 25%.
    • A penalty of 25% of the unpaid taxes if you fail to file a return for three or more years.
  5. Impact on credit score: Late filing and payment of taxes can negatively affect your credit score, making it harder to get loans or credit in the future.
  6. Audit risk: Filing a late tax return can increase your risk of being audited by the IRS, as they may be more likely to review your return to ensure accuracy and compliance.
  7. State and local penalties: Some states and local governments also charge penalties for late filing and payment of taxes, which can add to the total amount you owe.

To avoid these penalties and interest, it's essential to file your tax return on time and pay any owed taxes by the deadline. If you're unable to file on time, you can request an extension to file your return, which gives you an additional six months to file. However, keep in mind that an extension to file does not extend the time to pay any owed taxes, and you may still face penalties and interest if you don't pay your taxes by the original deadline.