IRS Penalties for Late Filing and Payment of Federal Taxes in 2022

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Tax Day in the U.S. usually falls on April 15—the date by which individual tax returns must be submitted to the IRS. The IRS charges penalties and interest if you file your taxes or make your payment after that date.

You can file for an extension by April 15 if you need more time to prepare your return. This will give you an additional six months to file. Still, you must pay any tax due by April 15, or you'll be penalized. Learn the consequences of late payments or unfiled returns and how to avoid them.

Key Takeaways

  • If you owe money after the federal tax filing date, you'll pay 0.5% for each month the payment is late, up to 25% of the remainder due.
  • Failing to file at all accumulates a higher rate of 5%, so it always pays to file on time.
  • Interest on the unpaid tax amount builds daily.
  • The IRS sometimes waives the penalty if your late payment comes with a very good reason.

The IRS Penalty for Late Payments

The late-payment or failure-to-pay penalty applies to any portion of your federal tax debt that remains outstanding as of the due date. The IRS imposes a failure-to-pay penalty of 0.5% for each month or part of a month that the tax goes unpaid, up to a total of 25% of the remaining amount due.

The Penalty for Filing Taxes Late

The penalty for filing late is steeper at 5% of your unpaid taxes as of the filing date. That 5% penalty is applied each month or part of a month that your return is late, but it will never exceed 25% of your unpaid taxes.

The clock begins ticking at your tax deadline, which is usually April 15, unless you filed for an extension by that date or the IRS otherwise extended the tax filing deadline. If you filed for an extension, you'd have until October 15 before this particular penalty kicks in.

For taxes required to be filed in 2022, you'll pay at least $435 or a penalty equal to 100% of the tax you owe—whichever is less—if you file more than 60 days after the due date.

Note

There is an exception to the late-filing penalty. You pay no penalty for filing a late return if the IRS owes you a refund.

IRS Quarterly Interest Rates

Interest compounds daily and is typically added to any unpaid tax from the time the payment was due until the date the tax is paid. The rates are set by the IRS every three months at the federal short-term rate, plus three percentage points.

The Internal Revenue Code requires that the IRS review its interest rate quarterly to keep pace with the economy, but this doesn't mean that the rate will always change quarterly. It won't change unless there's been a somewhat significant swing in the national economy.

If You Neither File Nor Pay

If you are not covered by a government extension and still have to pay your taxes by October—five months after the deadline—the failure-to-file penalty will max out. The failure-to-pay penalty of up to 25% of the amount owed will continue to accrue until the amount you owe is paid.

Request an Extension and Avoid the Penalty

​You should immediately file a request for an extension of time if you know your return is probably going to be late. It's a simple matter of filing Form 4868 with the IRS. Your request won't be accepted if the main filing deadline has already passed. In most years, you must submit the form by April 15. You don't have to wait until October 15 to file your return if you can submit it before that time.

Sometimes the IRS grants filing or payment extensions to residents of states affected by disasters and severe weather. A complete list of these extensions can be found on the IRS website.

You may also want to file for an extension if you've completed your return, and it looks like you owe taxes. This pushes your filing deadline back to October, and it helps you avoid the more serious failure-to-file penalty.

An extension gives you time to consult a tax professional to make sure you're not missing a deduction, a tax credit, or some other detail that could help you reduce the amount you owe. Keep in mind that even if your return can be extended, payment of taxes cannot.

Note

Estimate the amount of tax you think you'll owe when you request an extension, and make a payment when you submit the form.

Will the IRS Waive Tax Penalties?

The IRS might provide administrative relief and waive the penalties if you qualify under its First Time Penalty Abatement policy. To qualify, you must not have had any penalties in the prior three tax years. You must also have filed your current year's tax return on time and have paid (or arranged payment for) any tax you might owe.

The IRS might waive the late-payment penalty if you can show a reasonable and justifiable reason for not paying on time. Administrative relief might also be provided if you received misleading advice from the IRS, but this is harder to prove and claim.

You can contact the IRS by mail or by telephone to find out more.

Frequently Asked Questions (FAQs)

What happens if you don't file taxes?

If you don't file taxes and you owe taxes, you could be subject to failure-to-file and failure-to-pay penalties along with interest. If the IRS determines you owe taxes, it will send you a Notice and Demand for Payment. If you don't pay, the IRS can place a lien against your property, including your home and bank accounts. If you don't pay after receiving the Notice and Demand for Payment, the IRS will send a Final Notice of Intent to Levy 30 days before the levy. If you still don't file and pay, the IRS can seize your property. You might not need to file if you don't meet certain income requirements.

What is the minimum income to file taxes?

Whether you need to file depends on your age, income, and filing status. In general, you have to file if your earned income is more than the standard deduction. For example, if you file as single for the 2021 tax year and are younger than age 65, you need to file if your income is at least $12,550. You're also required to file if you're self-employed.

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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Internal Revenue Service. "Extension of Time to File Your Taxes."

  2. Internal Revenue Service. "Failure to Pay Penalty."

  3. Internal Revenue Service. "Topic No. 653 IRS Notices and Bills, Penalties, and Interest Charges."

  4. Internal Revenue Service. "Don't Lose Your Refund By Not Filing."

  5. Internal Revenue Service. "Penalty Relief Due to First Time Penalty Abatement or Other Administrative Waiver."

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