What's the Worst That Will Happen If You File Your Taxes Late (or Not at All)?

With the April 15 tax deadline looming tomorrow, many Americans are rushing to complete their returns. Personally, my phone is blowing up with all my procrastinator friends asking last-minute questions. And good for them for making the deadline at all, no matter how frenzied.

But what happens if you miss the deadline? The consequences vary dramatically depending on whether you simply file late or don't file at all. Let's take a look at what happens in either scenario, and what options you have if you're not ready to file by tomorrow.

What happens if you file your taxes late?

First off, it's important to clarify the difference between failure to file and failure to pay. Failure to file refers to neglecting to submit tax returns by the filing deadline, while failure to pay occurs when taxes owed are not remitted by the due date. The most important piece of advice here: File even if you can't pay. Filing on time avoids the failure-to-file penalty, which is typically higher than the failure-to-pay penalty.

Requesting an extension

The good news is that the IRS offers a six-month extension for anyone who needs more time to prepare their tax return. That means as long as you request an extension by tomorrow, you have until Oct. 15 to file without penalties.

Here's what you need to know:

• File Form 4868 ("Application for Automatic Extension of Time to File U.S. Individual Income Tax Return") by April 15

• This gives you until October 15, 2025, to file your complete tax return

• Important: An extension to file is NOT an extension to pay any taxes owed

• You still need to estimate and pay any taxes due by April 15 to avoid penalties

Filing an extension is completely legal and doesn't increase your audit risk—but tomorrow is the last day to get your request in for this avenue.

Penalties for late payment (even with an extension)

Like I mention above, there's a big difference between failure to file and failure to pay. The IRS imposes a failure to pay penalty one-half of one percent (0.5%) for each month, or part of a month, up to a maximum of 25% of the amount of tax that remains unpaid from the due date of the return until the tax is paid in full.

Interest accrues on both unpaid taxes and penalties from the due date until the debt is settled. These penalties apply from April 15 until you pay your tax bill in full.

State tax considerations

Most states follow similar extension rules to the federal government, but deadlines and specific requirements vary. Check with your state's tax agency for their specific extension procedures.

What happens if you don't file your taxes at all?

Failing to file your tax return at all is much more serious than filing late, with consequences that can include:

Severe financial penalties

If you owe the federal government money, the failure-to-file penalty is around 5% of the unpaid taxes due each month until you hit the 25% maximum. This penalty is ten times higher than the failure-to-pay penalty. After 60 days, you will be charged $485, or 100% of the tax due (whichever is less). Plus, the same interest charges that apply to late payments also apply here.

Loss of refunds

If you're due a refund, you generally won't face penalties for filing late. However, you must file within three years of the original due date to claim your refund. After three years, you permanently forfeit your refund.

IRS enforcement actions

For persistent non-filers who owe taxes, the IRS can take increasingly severe actions:

• Tax liens against your property

• Wage garnishment

• Seizure of assets

• The IRS may file a "Substitute for Return" (SFR) on your behalf, which won't include deductions or credits you might qualify for, and often results in a higher tax bill than if you had filed yourself.

Criminal prosecution

In extreme cases of willful non-filing, especially if combined with other tax evasion tactics, you could face criminal charges for tax evasion. That means penalties up to $100,000 and five years imprisonment. Luckily, the IRS typically pursues criminal charges only in cases of deliberate fraud or persistent non-compliance—not simple mistakes or procrastination.

What to do if you can't pay

If your reason for not filing is an inability to pay, remember:

1. File anyway: The penalties for not filing are much worse than those for not paying.

2. Request a payment plan: The IRS offers installment agreements for taxpayers who can't pay in full.

3. Consider an "Offer in Compromise": In cases of serious financial hardship, the IRS may settle for less than the full amount owed.

4. Request "Currently Not Collectible" status: If you're facing extreme financial hardship, the IRS may temporarily halt collection efforts.

To find out more about the payment options above, here's the best way to reach an agent at the IRS.

The bottom line

Missing the tax deadline isn't ideal, but filing an extension is straightforward and gives you breathing room to prepare your return properly. The critical thing to remember is that it's always better to file—even if you can't pay what you owe—than not to file at all. The penalties for non-filing are substantially higher and can lead to much more serious consequences.

If you're pressed for time with tomorrow's deadline approaching, consider filing an extension today and then addressing your complete tax situation when you have more time to prepare properly. This could also buy you time to consult with a qualified tax professional.