IRS Penalties for Late Filing and Payment of Federal Taxes in 2023

Tax Day in the U.S.—the date by which individual tax returns must be submitted to the Internal Revenue Service (IRS)—usually falls on April 15. It's sometimes a few days later if April 15 falls on a weekend or on a national holiday. The IRS charges penalties and interest if you file your taxes or make your payment after this date.

You can file for an extension by April 15 if you need more time to prepare your return, or by April 18 in 2023, the due date for your 2022 tax return. This will give you an additional six months to file. But you must still 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

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

Penalty for Late Payments

The late payment penalty or failure to pay penalty applies to any portion of your federal tax debt that remains outstanding as of the April 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 your tax return late is steeper at 5% of your unpaid taxes as of the filing date. The 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 unless you filed for an extension by that date or the IRS has otherwise extended the tax filing deadline. You'd have an additional six months until October before this particular penalty kicks in if you file for an extension of time to file by the April due date .

You'll have to pay at least $450 or a penalty equal to 100% of the tax you owe, whichever is less, if you file your 2022 tax return more than 60 days after its due date on April 18, 2023.

Note

There's an exception to the late filing penalty. You'll generally pay no penalty for filing a late return if the IRS owes you a refund.

IRS Quarterly Interest Rates

Interest compounds daily on what you owe the IRS and it's 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.

Note

The interest rate is 7% per year for the first quarter of 2023, up from 6% in the last quarter of 2022.

If You Neither File Nor Pay

The failure to file penalty will max out after five months if you still haven't paid what you owe, but 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 a six-month 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 April filing deadline has already passed. You don't have to wait until October to file your tax return if you can submit it before that time.

Sometimes the IRS grants filing or payment extensions to residents of states that have been 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 with 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, if possible.

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. You must not have had any penalties in the prior three tax years to qualify. 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?

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

What is the minimum income to file taxes?

Whether you're required to file a tax return depends on your age, your income, and your filing status. You must generally file if your income is more than the standard deduction. That would be $12,950 for tax year 2022, the return you'd file in 2023, if you're a single taxpayer who's younger than age 65. The deduction increases if you're married filing a joint return or you qualify as head of household. You're also required to file if you're self-employed.

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. IRS. "IRS Sets January 23 as Official Start to 2023 Tax Filing Season; More Help Available for Taxpayers This Year."
2. IRS. "Failure to Pay Penalty."
3. IRS. "Failure to File Penalty."
4. IRS. "Topic No. 653 IRS Notices and Bills, Penalties, and Interest Charges."
5. IRS. "Don't Lose Your Refund By Not Filing."
6. IRS. "Interest Rates Increase for the First Quarter of 2023."
7. IRS. "Penalty Relief Due to First Time Penalty Abatement or Other Administrative Waiver."
8. IRS. "IRS Provides Tax Inflation Adjustments for Tax Year 2022."

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