If you applied for an extension for your 2023 tax return and have not yet completed your filing, it’s crunch time: The final deadline for 2023 returns is on Tuesday, Oct. 15, and failure to file could result in a penalty.
The IRS allows individuals to request a six-month extension from the standard tax return deadline of April 15—but this only gives you extra time to put together your paperwork. Any taxes owed are still due in April, after which you also begin incurring interest and late fees. So if you haven’t filed or paid, you should be making a plan to do both as soon as possible.
The failure-to-file penalty is 5% of your unpaid taxes for any month or partial month that your return is past due and is capped at 25% of your total bill. The failure-to-pay penalty is 0.5% of your unpaid taxes for any month or partial month that your bill is past due and is also capped at 25%, though you will also accrue interest until your balance is paid in full. (While you can get hit with both penalty types at once, they partially offset one another: The failure to file penalty will be reduced by the amount of the failure to pay penalty applied in that month, so the most you’ll pay is 5%, rather than 5.5%.)
The IRS does offer both short- and long-term payment plans if you aren’t able to cover your outstanding taxes by the April 15 deadline, which give you an additional 180 days or up to 72 months, respectively. While you’ll still pay interest, the failure-to-pay penalty will be reduced by half as long as you’re current on your plan. You can set this up online.
Filing extensions for natural disasters
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While most taxpayers who were granted a filing extension must get their returns in now, there are some exceptions for those located in areas affected by disasters, including Hurricane Helene. Residents of and those with businesses in Alabama, Georgia, North Carolina, and South Carolina and parts of Florida, Tennessee, and Virginia who had approved extensions now have until May 1, 2025 to submit their 2023 tax returns. This deadline also automatically applies to 2024 returns.
Taxpayers in 25 states are currently eligible for extensions past Oct. 15—the IRS has more information on who qualifies its website.
Note that just like the standard extension, disaster-related extensions do not relieve the obligation to pay your tax bill on time. It applies only to the filing of your return.