IRS Penalties for Filing an Extension

by Gail Sessoms ; Updated July 27, 2017
Close up of tax documents

The Internal Revenue Service sets April 15 as the annual due date to file individual tax returns. The agency offers U.S. citizens and residents two methods to apply for a 6-month filing extension: mailing the proper form or submitting it through the e-file system on the IRS website. Even with an approved extension of time to file, taxpayers could face late filing penalties, in addition to penalties for late payment of any taxes due.

Filing Extension

The IRS allows taxpayers who live and work outside of the United States and Puerto Rico, including members of the military, an automatic two-month filing extension or a six-month extension that requires an application. Eligible taxpayers who need more than the two-month extension may apply for the six-month extension by April 15 with IRS Form 4868. June 15 is the due date for the two-month extension. October 15 is the due date for the six-month extension. Military personnel in combat zones may qualify for longer extensions.

Late-Filing Penalties

The IRS usually assesses a late-filing penalty for late returns, including those filed with an approved filing extension, but only if you don't get your tax return filed by the extended October due date. Include a written statement with your return to explain why you are filing late. The late-filing penalty is 5 percent for each month taxes are unpaid, with a maximum penalty of 25 percent.

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Late-Payment Penalties

A taxpayer must pay any amount owed to the IRS by the April 15 date to avoid late-payment penalties, even if a filing extension is approved and the taxpayer has an approved payment installment agreement with the IRS. The IRS charges a late-payment penalty of one half of 1 percent of unpaid taxes for each month the taxes are not paid, with a maximum penalty of 25 percent. The IRS might not assess a failure-to-pay penalty if you include payment for at least 90 percent of the taxes owed with your extension request and pay the balance by the extended file date. Request waiver of the penalty with a written statement explaining why you will pay your taxes late by April 15.

Missed Filing Dates

The IRS assesses a late-filing penalty for taxpayers who do not have an approved filing extension and who miss the regular filing date of April 15 by more than 60 days. The penalty also applies to taxpayers who have a filing extension and miss their extended filing dates by more than 60 days. The penalty for both is $135 or the total tax balance owed for the return, whichever is the lesser amount. You may submit a written statement explaining the reason for missing the filing dates and asking for a waiver of the penalties.

About the Author

Gail Sessoms, a grant writer and nonprofit consultant, writes about nonprofit, small business and personal finance issues. She volunteers as a court-appointed child advocate, has a background in social services and writes about issues important to families. Sessoms holds a Bachelor of Arts degree in liberal studies.

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