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We know life gets complicated. If you weren’t able to file your taxes by the deadline, here’s what you need to know about filing extensions, what the penalties and fees are for failure to file and failure to pay, and how you can get yourself back on track.
When was the tax deadline this year?
The last day to file taxes for the 2022 tax year was April 18, 2023. However, you could have filed an extension that would give you another 6 months, until October 16, 2023. Looking ahead to next year, the tax filing due date for 2023 taxes is April 15, 2024, and the extended deadline is October 15, 2024.
It’s important to note that regardless of the extension on your forms, you still would need to pay your taxes or set up a payment plan by the original tax deadline.
How do I file for an extension?
Filing IRS Form 4868 grants individual taxpayers 6 more months from the tax return deadline to file their individual tax return without being charged a late-filing penalty.
Ultimately, filing Form 4868 grants more time to prepare and file one’s tax return. It does not extend the time to pay your balance due if you owe taxes. Interest and penalty charges will pile up until you pay the balance due even if you file Form 4868. Read more about this below.
You do not need to give the IRS a reason for requesting an extension. All you need to do is file the form by the tax filing deadline, estimate the amount of your balance due, and pay at least 90% of the estimated balance due.
What are the penalties if I don’t file an extension?
If you think you may owe, but missed the deadline without requesting an extension, you should file and pay as soon as possible to limit penalties and interest.
If you owe and don’t file on time, the IRS imposes two forms of penalties. When there is a balance due, you are subject to the failure-to-file penalty, which is normally 5% of your unpaid tax. This penalty won’t exceed 25% of your unpaid taxes.
Then there’s the failure-to-pay penalty, which is usually 0.5% of your unpaid tax. The IRS calculates this penalty based on how long your taxes are overdue and unpaid. Unpaid tax is the amount of taxes left after subtracting amounts paid through withholding, estimated tax payments, and allowed refundable credits.
The failure-to-pay penalty will not exceed 25% of your unpaid taxes. During the period when you owe both penalties, they are combined so they don’t exceed a total of 25% per month. Penalties are assessed every month, or partial month, until you file your return and pay your taxes.
And on top of these penalties, you’ll owe interest. Because of this, if you think you’ll owe, you should file your tax return as soon as possible and work out a payment plan if you’re unable to pay the lump sum all at once. A tax professional will know how to get you through this with the least amount of stress.
When were state taxes due?
Usually, you should file federal and any state returns at the same time, but some state deadlines vary. If you're wondering if you can file your state taxes before your federal taxes, a Tax Pro can help you with your situation.
Will the deadline for my state taxes also be extended if I receive a federal tax extension?
This varies by state. Some states, including Wisconsin, Alabama, and California, offer automatic extensions to file your state income tax return without having to file any other forms. Certain states, like New York, will grant you an extension, but you must request it.
For the nine states that do not impose a state income tax, you don’t even have to file an income tax return, let alone request an extension. Reach out to a local Jackson Hewitt Tax Pro and your state tax authority to confirm the steps you will need to follow.
Who may qualify for extra time to file and pay taxes in 2023?
You may have also automatically qualified for extra time to file and pay taxes due without penalties and interest, if you are among these groups:
- Members of the military who served, or are currently serving, in a combat zone. You may qualify for an additional extension of at least 180 days to file and pay taxes.
- Support personnel in combat zones or contingency operations in support of the Armed Forces. You may also qualify for a filing and payment extension of at least 180 days.
- Certain disaster victims. Those who qualify have more time to file and pay what they owe. See below for more information.
- If you live outside the U.S., are a U.S. citizen or resident alien who lives and works outside the U.S. and Puerto Rico or are an active-duty military member stationed or deployed outside of the U.S but not in a combat zone, you may qualify for a two-month filing and payment extension. The IRS will charge interest on any taxes still owed after the original due date.
Can extreme weather push back filing deadlines?
Often, the IRS will delay the federal filing deadline in states affected by extreme weather conditions or storms. This year, these included:
- Taxpayers in Arkansas, Mississippi, and Tennessee affected by tornadoes, high winds, and severe storms in March have until July 31, 2023.
- Due to winter storms, mudslides, and other natural disasters, the IRS has also given residents of Alabama, California, and Georgia until October 16, 2023, to file federal returns and make payments.
Will I be penalized if I file late?
This year, if you filed a federal extension by April 18, you would not have been penalized. If you didn’t file an extension by April 18, or filed after October 16, when you were granted an extension, you will be penalized.
What are the penalties for filing my taxes late?
For federal taxes, the late filing penalty is 5% of the unpaid taxes with a minimum penalty of $330, or 100% of the unpaid taxes if less, when the return is filed late. The penalty increases 5% a month until the taxes are paid, or the penalty reaches 25% of the unpaid taxes. The penalty for filing late is higher than the penalty for paying late. Work with a Jackson Hewitt Tax Pro to figure out your state penalties.
The IRS has many options, including payment plans. Even if you can't afford to immediately pay the full amount of taxes owed, you should still file a tax return to reduce possible late-filing penalties. The IRS offers a variety of options for taxpayers who owe the IRS but cannot afford to pay.
If you owe taxes, you can pay quickly and securely via your IRS Online Account, IRS Direct Pay, or you can apply online for a payment plan (including an installment agreement).
If you pay electronically, you’ll receive immediate confirmation when you send your payment. With Direct Pay and the Electronic Federal Tax Payment System (EFTPS), you can receive email notifications about your payments. A Jackson Hewitt Tax Pro can help you set these up.
First-time penalty abatement
You may qualify for penalty relief if you have filed and paid on time for the past three years and meet other important requirements, including paying or arranging to pay any tax due. For more information, work with your tax professional who can guide you through the rules around first-time penalty abatement.
Will filing an extension delay my refund?
If you choose not to file a return because you feel you don’t earn enough to meet the filing requirement, you may miss out on receiving a refund due to potentially eligible tax credits. Until you file your taxes, you can’t receive your refund.
The most common examples of these refundable credits are the Earned Income Tax Credit and Child Tax Credit Taxpayers often fail to file a tax return and claim a refund for these credits and others for which they may be eligible.
The IRS doesn’t impose a penalty for filing after the April deadline if a refund is due. However, some states do charge a penalty for late filing, even when there is a refund due. You can talk to one of our Tax Pros about your options if you think this may apply to you.
Does an extension make sense for me?
To sum it up, here’s a quick guide on if filing an extension makes sense for you:
Gives you more time to complete and file your tax return with the IRS
It may require as much paperwork to file an extension as to file your complete and final return
No penalties or interest for late filing
You still need to pay your estimated taxes
Less stress to file on time
Delays your refund
You may need to pay an extension fee on top of your tax prep fee
You might have to request a state extension, too
We are here to help you navigate the complexities of missing a tax deadline, filing an extension and helping to manage any penalties, fees or stress that may arise. Find an office near you, where one of our seasoned Tax Pros can help with any questions you may have.
About the Author
Mark Steber is Senior Vice President and Chief Tax Information Officer for Jackson Hewitt. With over 30 years of experience, he oversees tax service delivery, quality assurance and tax law adherence. Mark is Jackson Hewitt’s national spokesperson and liaison to the Internal Revenue Service and other government authorities. He is a Certified Public Accountant (CPA), holds registrations in Alabama and Georgia, and is an expert on consumer income taxes including electronic tax and tax data protection.