What happens if you are late with your taxes?

Answer 1

It sounds like your question refers to late filing, however, you could be asking about paying late.

If you are an individual taxpayer and you have income from either self-employment or as an employee then you are required to file your taxes every year by April 15. In the case that you are unable to file on time you should file an extension to file which will extend your filing requirement until October 15 of the same year. If you file by that date after requesting an extension to file there are no consequences. Should you not file on time then you can be penalized for failure to file, this penalty accrues daily on your balance at a monthly rate of 5% per month up to 25% yearly, in addition to interest. As you can see this starts to add up quickly. Now a taxpayer continues to go unfiled then the IRS can produce a Substitute for Return or SFR, once they do all the penalties and interest will backdate to the original date when you were required to file. It is estimated that a tax debt will double every 3 to 4 years. In the case when the return would have produced a refund then you can file anytime within 3 years of the due date of the taxes, after that you forfeit the opportunity to claim a refund while you still have a filing requirement (by law!).

In the case that you are inquiring about paying late, then you are dealing with also the failure to pay penalty or FTP penalty. Eventually if enough time goes without addressing the issue the IRS will send out notices, turn you into collections and levy bank accounts and / or wages.