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What Happens If You File Your Taxes Late?

Published October 2026 | By Ray Chowdhury, CPA & CTRC

The two penalties: filing late vs. paying late

The IRS treats filing and paying as two separate obligations, and each has its own penalty:

• Failure to file: generally 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25%.
• Failure to pay: generally 0.5% of the unpaid tax for each month or part of a month, also capped at 25%.

When both apply in the same month, the filing penalty is reduced by the payment penalty, so the combined charge is 5% per month for the first five months. Interest also runs on unpaid tax from the original due date until it's paid.

The minimum penalty for very late returns

If a return is more than 60 days late, a minimum penalty kicks in. For returns required to be filed in 2026, it's the smaller of $525 or 100% of the tax you owe. That means even a small balance can produce a penalty that equals the whole tax bill.

What if I'm owed a refund?

The failure-to-file penalty is based on unpaid tax, so if you're due a refund there's generally no penalty. The real risk is the deadline: you usually must file within three years of the return's due date to claim a refund. After that, the money is forfeited by law.

File on time even if you can't pay

Because the filing penalty is so much larger, the best move when money is tight is to file on time (or request an extension) and pay what you can. You can then look at an IRS payment plan for the balance. For individuals who filed on time, the late-payment penalty rate is cut to 0.25% per month while an approved payment plan is in place.

Can the penalty be removed?

Sometimes. The IRS can waive penalties when you show reasonable cause, such as a serious illness or a disaster, and first-time penalty relief may be available if you have a clean history. Interest generally can't be waived unless the underlying penalty is removed.

What to do now

1. File the return as soon as possible, even if it's incomplete on the payment side.
2. Pay as much as you can to cut the penalty and interest base.
3. Open any IRS notice right away and respond by the date shown.
4. If several years are missing, read what to do if you haven’t filed in years.

Frequently asked questions

What is the penalty for filing taxes late?

The failure-to-file penalty is generally 5% of the unpaid tax for each month or part of a month the return is late, capped at 25%. For returns required to be filed in 2026 that are more than 60 days late, the minimum penalty is the smaller of $525 or 100% of the tax owed.

Is it worse to file late or pay late?

Filing late is usually far more expensive. The IRS notes the late-filing penalty is typically about ten times higher than the late-payment penalty, so file on time even if you can't pay in full.