What Happens If You File Taxes Late But Don’t Owe?

Filing taxes late can feel overwhelming, but what happens if you don’t owe anything? While it’s true that penalties for late filing are typically tied to unpaid taxes, this doesn’t mean there are no consequences for missing the deadline. Whether it’s delaying your refund or missing out on potential credits, filing late—even if you don’t owe—can still have an impact.

In this blog, we’ll break down the implications of late filing when you don’t owe taxes, explain key deadlines, and offer tips to help you stay on track. Don’t let the confusion around tax filing hold you back—read on to ensure you’re making informed decisions!

What Happens If You Don’t File Your Taxes?

Failing to file taxes can lead to significant consequences, especially if you owe money to the IRS. According to IRS guidelines, there’s no penalty if you are due a tax refund and miss the filing deadline. However, the situation changes drastically if you owe taxes.

There are two common penalties: one for failing to file and another for failing to pay. Beyond these financial penalties, the consequences can escalate. Choosing not to file taxes at all could result in being charged with tax evasion, a serious offense that carries up to five years in prison and fines reaching $250,000.

What Is the Penalty for Filing Taxes Late?

Filing your taxes late can cost you. The IRS charges a penalty of up to 5% of the unpaid taxes for every month or part of a month your return is late. This penalty begins accruing immediately after the filing deadline. For example, the filing deadline for the 2019 tax year was April 15, 2020, and any unpaid taxes after that date incurred penalties.

Tax season has a way of sneaking up on you, and if you tend to put off tasks, you could be in a tough spot when the filing deadline rolls around. The process of completing your taxes can feel overwhelming, with complicated forms, ever-changing tax laws, and strict deadlines. However, avoiding this task can lead to costly consequences. Taking proactive steps to file on time will help you avoid unnecessary penalties and stress.

Are There Different Penalties for Filing Late and Paying Late?

Absolutely! The IRS treats late filing and late payment as two separate issues, each with its own penalties. If you owe taxes, fail to file on time, and delay payment, you’ll face charges for both penalties, plus interest. When both penalties apply, the combined amount is capped at 5% of the unpaid taxes per month. It’s important to address these issues promptly to avoid escalating costs.

What’s Worse: Filing Late or Paying Late?

When it comes to tax penalties, filing late is considered a more serious offense than paying late. The IRS imposes a smaller penalty for late payments—only 0.5% of the unpaid taxes per month, capped at 25%. While both situations can increase the amount you owe, failing to file your tax return on time leads to much harsher penalties compared to filing on time and not paying your full amount right away.

No Expiration on IRS Collection for Failure to File

The IRS doesn’t play around when it comes to collecting taxes. If you don’t file your tax return, there’s no expiration date for the government to pursue what you owe. This includes taxes, penalties, and accumulating interest. Even if years go by, the IRS retains the right to assess and collect unpaid taxes.

Whether you’re expecting a refund or owe money to the IRS, the agency can come after you indefinitely until you file. The law doesn’t start the clock on any statute of limitations for tax collection until your tax return is submitted.

Filing Starts the 10-Year Clock

Once you file your tax return, the 10-year statute of limitations on IRS collections begins. This time limit protects taxpayers from indefinite collection efforts, but only after the IRS has received your return.

This means filing your back taxes is crucial. The sooner you file, the sooner the clock starts ticking, potentially saving you from years of accumulating interest and penalties.

Delays Lead to Bigger Penalties

Procrastination can cost you. The longer you wait to file, the more interest and penalties pile up, making your tax burden grow larger over time. Acting quickly to file back taxes can prevent further financial consequences. Don’t wait until it’s too late—time is money, and filing sooner can save you both.

How to File a Tax Extension and Avoid Late Penalties

Are you worried about missing the mid-April tax deadline? Don’t stress—there’s a solution! If you think you can’t file your tax return on time, you can request a filing extension using Form 4868. This extension gives you an extra six months to complete and submit your tax return, pushing your deadline to mid-October before late penalties kick in.

However, there’s one crucial thing to remember: filing an extension doesn’t mean you get extra time to pay your taxes. You’re still required to estimate and pay what you owe by the April deadline to avoid a failure-to-pay penalty. If you don’t, the IRS may impose additional fees until the balance is paid in full. Filing for an extension can help you sidestep failure-to-file penalties, but staying on top of your tax payment is key to avoiding further issues.

Is There a Penalty for Filing Taxes a Day Late?

What happens if you miss the tax filing deadline by just one day? Will the IRS charge you a penalty? The answer is yes—if you owe taxes, filing even a day late can result in a late filing penalty. The good news? Being a day late is far better than delaying for weeks or months.

The longer you wait to file, the higher the penalties will grow. Once you’re 60 days past the deadline, the IRS charges a minimum penalty of $205 or 100% of your unpaid taxes—whichever is less. Even if you’re unable to pay your tax bill right away, filing on time can help you avoid additional fees and minimize the financial burden.

Will You Be Penalized for Filing Taxes Late If You Don’t Owe Anything?

Did you know that three out of every four taxpayers receive a tax refund? If you’re one of the lucky majority who doesn’t owe the IRS, you won’t face a penalty for filing late. That said, delaying your tax return also delays the arrival of your refund.

If you miss the filing deadline, don’t worry—you still have time to claim your refund. You can file late and receive your refund up to three years after the original deadline. However, once that window closes, any unclaimed refund will be sent to the U.S. Treasury. For example, if you didn’t file your 2019 taxes by April 15, 2023, your refund is no longer accessible.

The table below shows key tax filing deadlines and the final dates to claim your refund.

These deadlines are crucial if you want to claim the refund you’re entitled to. File your taxes as soon as possible to ensure you don’t leave money on the table. Even if you’re filing late, it’s never too late to take action within the three-year period.

How Are Penalties for Late Income Tax Payments Determined?

You filed your taxes on time and sidestepped the failure-to-file penalty, but now you’re facing trouble making your income tax payments. Understanding how much you’ll owe in penalties can feel tricky since the IRS evaluates each case individually. However, getting a clear estimate can help you prepare. The good news is that a member of the Austin & Larson Tax Resolution team can assist you in finding the best way to resolve your situation, ensuring you minimize any additional fees and pay the least amount possible.

Can I Get More Time to Pay My Tax Bill?

Yes, it’s possible to request extra time to pay your taxes, but the process has strict rules, making it essential to have professional assistance to guide you through the steps.

To get an extension for your tax payment, you need to file Form 1127. Here’s what you must do to qualify:

• Submit your Form 1127 to the IRS before your tax due date.
• Include a detailed list of all your assets and liabilities as of the end of the month. You’ll also need to show an itemized account of income and expenses for the three months leading up to your extension request.
• Prove that paying the taxes by the deadline would cause significant financial hardship.
• You’ll need to demonstrate that paying the full amount would lead to severe financial loss and that borrowing money or selling assets isn’t an option to cover the bill.

I Can’t Pay My Back Taxes in Full: What Should I Do?

If you’re struggling to pay your back taxes, it’s crucial that you still file on time or request an extension. Failing to do so could result in significant penalties, especially if you don’t pay at least 90% of what you owe by the deadline. The longer you wait to file and pay, the more penalties will accumulate, making it harder to resolve the situation. But don’t worry—there are options to help manage your tax debt without it spiraling out of control. Here’s a breakdown of potential solutions, and how a tax expert can help you navigate them.

1. Pay with a Credit Card

If you’re short on cash but have a credit card, you might consider putting your tax payment on it. This option essentially shifts your debt from the IRS to your credit card company. The benefit here is that credit cards may offer lower interest rates than IRS penalties, potentially saving you money in the long run. However, you need to be careful about your ability to repay the credit card balance.

2. Offer in Compromise (OIC)

If paying your taxes seems impossible, the IRS may accept an Offer in Compromise (OIC), which allows you to settle for less than the full amount owed. To qualify, you’ll need to propose a new, lower tax balance. However, the IRS will only accept your OIC if they believe that paying the full amount would cause you significant financial hardship or if it’s unlikely they will collect the full balance.

To apply for an OIC, you’ll need to submit Form 656-B and pay an application fee of $205. If your income is below the poverty line, this fee might be waived. You’ll also need to provide detailed financial documents, such as income statements, bank records, and more. The IRS will thoroughly assess your financial situation to determine if your offer is reasonable.

The IRS typically approves OICs under three conditions:

• There’s doubt about the accuracy of the amount owed.
• It’s unlikely you will ever be able to pay the full amount.
• Paying the full amount would cause severe financial difficulty.

Working with a tax professional can help ensure your offer stands the best chance of being accepted, as the process requires a realistic and detailed proposal.

3. Installment Agreements

If you can’t pay your taxes in full but need more time, the IRS may approve an installment agreement. This agreement allows you to pay your tax debt over time in smaller, more manageable monthly payments. To apply, use Form 9465 and ensure your total tax obligation is under $50,000. You’ll also need to demonstrate that you can pay off your debt within 72 months.

Before submitting the application, make sure all your tax filings are up to date, as the IRS will not approve your installment request if you’re behind on any filings. Once your agreement is approved, it’s vital to continue making payments as scheduled and file all future tax returns on time. If you fail to do so, the IRS may revoke the agreement and demand the full amount owed.

A tax professional can help you negotiate terms that align with your financial situation and ensure that you avoid further penalties.

4. Filing for Bankruptcy

Filing for bankruptcy is often considered a last-ditch effort for individuals facing severe financial hardship. However, it’s important to note that only certain tax debts can be discharged through bankruptcy. If you meet the following criteria, you may be able to wipe out your tax obligations through Chapter 7 bankruptcy:

• It’s been 240 days since the IRS assessed your tax bill. This time frame can be extended if there were delays in collections due to other circumstances, like an existing installment agreement.
• Your tax return is at least three years old.
• You’ve filed your tax return at least two years before filing for bankruptcy.
• You haven’t committed fraud or tax evasion. If your taxes were filed fraudulently or with intent to avoid payment, they cannot be discharged through bankruptcy.
• Your debt is income tax-related. Other types of tax debts, like payroll taxes or penalties, are not dischargeable.

Consult with a tax professional or bankruptcy attorney before considering this option, as bankruptcy has long-term financial and legal consequences. They can help you explore all available solutions to ensure you make the best choice.

Get Help with Your Tax Issues

If you’re unsure which option is right for you, it’s important to consult with a tax resolution specialist. Our team at Austin & Larson Tax Resolution can guide you through your available choices and help you settle your tax debt in the quickest and most effective way possible. Don’t let back taxes overwhelm you—take action today to resolve your tax issues and avoid further penalties.

Am I Still Able to File My Taxes?

Absolutely! Many clients reach out to us feeling stressed and uncertain about their options when it comes to filing late taxes. If you’re facing pressure from the IRS and asking, “Can I still file my taxes?”—the answer is yes! We are here to guide you through the process of submitting your tax returns, even for past years, and help you get back on track with your tax obligations.

We offer comprehensive assistance in preparing your tax returns and reviewing your financial situation to ensure that you aren’t overpaying. Additionally, we’ll work with you to create a solid plan to stay organized and avoid future penalties for late filings. Our goal is to get you back into good standing with the IRS and keep you there.

The Role of Tax Professionals in Meeting Deadlines

Tax deadlines can feel overwhelming, especially with the complexities of ever-changing tax laws and the pressure of ensuring every detail is correct. Missing these deadlines not only causes stress but can also result in costly penalties and interest charges. That’s why partnering with a tax professional is one of the smartest decisions you can make to stay on track and stress-free.

Expert Knowledge and Guidance

Tax professionals are trained to understand the ins and outs of the tax code. They stay up to date with the latest changes in laws, regulations, and filing requirements so that you don’t have to. By working with them, you ensure that your taxes are handled correctly and in compliance with the law. This level of expertise reduces errors and minimizes the risk of filing late due to confusion or oversight.

Personalized Planning and Organization

One of the biggest advantages of hiring a tax professional is their ability to create a personalized plan tailored to your financial situation. They can organize your documents, identify potential deductions, and help you maximize refunds or minimize your tax liability. With their guidance, you can avoid last-minute scrambling to gather paperwork, making the filing process much smoother and more efficient.

Timely Reminders and Proactive Strategies

Tax professionals don’t just help during tax season; they can assist throughout the year. Many offer proactive strategies to prepare for upcoming deadlines and even send timely reminders to ensure you stay ahead of the curve. Whether it’s quarterly estimated payments, year-end planning, or extensions, their support helps you avoid costly delays.

Peace of Mind

Knowing that a trusted expert is handling your taxes can provide unmatched peace of mind. Tax professionals take the guesswork out of filing, leaving you free to focus on other priorities. Instead of stressing over deadlines and complicated forms, you can trust that everything will be completed on time and accurately.

In summary, tax professionals play a vital role in helping individuals and businesses meet their tax deadlines. Their expertise, organizational skills, and proactive approach can save you time, money, and unnecessary stress. When it comes to taxes, having a professional by your side is an investment in financial stability and peace of mind.

Conclusion

Filing your taxes late, even if you don’t owe anything, can have consequences such as delaying refunds or missing out on valuable credits. It’s important to stay informed and proactive to avoid unnecessary complications. Whether you need help filing late taxes, navigating IRS penalties, or exploring options for tax debt resolution, Austin & Larson Tax Resolution is here to help. Our experienced team provides personalized support to ensure you remain compliant with tax laws while minimizing stress and financial burden. Contact us today to get your taxes back on track and secure peace of mind!

FAQs

What happens if I file my taxes late but don’t owe anything?
You won’t face penalties if you don’t owe taxes, but filing late could delay any refund you’re entitled to or cause you to miss valuable tax credits.

Can I still file taxes for previous years?
Yes, you can file late returns for up to three years to claim a refund. After this window closes, you forfeit your right to that refund.

Is there a penalty for filing taxes late by one day?
Yes, if you owe taxes, penalties begin accruing the day after the filing deadline. However, filing a day late incurs fewer penalties than waiting weeks or months.

Does the IRS charge interest on unpaid taxes?
Yes, interest accrues daily on unpaid taxes starting from the filing deadline. It’s important to pay as much as possible to minimize these charges.

What should I do if I can’t pay my taxes in full?
You can request an installment agreement, apply for an Offer in Compromise, or consult with a tax professional to explore your options. Filing on time is still essential to avoid additional penalties.

Users Also Say

If I do not owe taxes, can I still be penalized for filing taxes late?

J** G***é

There’s a simple solution: Request an extension before the deadline. The only cost is the interest on any outstanding taxes. If you don’t owe anything, there’s no charge at all.

However, if you don’t owe any taxes, you might not need to file at all. Check the filing requirements to see if you need to submit a return.

One reason to file is if you had taxes withheld and the IRS owes you money. But if the refund is smaller than the cost of filing, it might be better to skip it altogether.

C P****k Sa***s

If you genuinely owe nothing or are eligible for a refund, there’s no penalty for filing your taxes late.

But how do you know if you owe nothing? Was it because you didn’t earn any income? If you don’t at least file your taxes, you may be overlooking potential tax credits for low-income individuals that could result in a refund, even if you didn’t owe any taxes.

In such cases, failing to file could be costing you. Additionally, remember that you only have a three-year window from the original filing deadline to submit your return and claim a refund for that tax year.

St****n C. M****k

I’d like to mention that this likely refers only to personal income tax forms, but it’s important to remember that many overlook their S-Corp or partnership returns. Even though these are flow-through entities with no tax due at the entity level, late filing penalties can still apply. If you anticipate needing more time, always file an extension by the March deadline for these entities.