The October 15 extended filing deadline has passed. If you requested an extension for your 2024 tax return and still have not filed, you are now late, and penalties are accruing. Here is what you need to know and what to do next.
The Penalty Clock Is Running
The failure-to-file penalty is 5% of your unpaid tax for each month or partial month the return is late, up to a maximum of 25%. This is separate from the failure-to-pay penalty, which is 0.5% per month on unpaid tax. Both penalties accrue simultaneously, and interest compounds daily on top of them at the current IRS rate of 7%.
If you filed an extension and paid your estimated tax liability by the original April deadline, your penalty exposure is limited to the failure-to-file penalty on any remaining balance. If you neither filed nor paid, both penalties apply from the original due date.
File As Soon As Possible
The single most effective thing you can do is file your return now. The failure-to-file penalty stops accruing once the return is submitted, even if you cannot pay the full amount owed. Filing a return with a balance due is significantly better than not filing at all.
If you owe money and cannot pay in full, the IRS offers several options: short-term payment plans (up to 180 days, no setup fee for online applications), long-term installment agreements (monthly payments for up to 72 months), and in some cases, offers in compromise for taxpayers who genuinely cannot pay. All of these require a filed return as the first step.
Business Returns Have Different Stakes
Partnership returns (Form 1065) and S-Corp returns (Form 1120-S) carry per-partner or per-shareholder penalties for late filing: $235 per partner per month for 2024 returns, up to 12 months. A four-partner S-Corp that is three months late faces a $2,820 penalty even if no tax is owed. These penalties are assessed automatically and are difficult to abate without reasonable cause.
If your business return is late, file immediately and include a reasonable cause statement explaining the delay. The IRS has discretion to abate penalties for first-time filers or those with a clean compliance history (the First Time Penalty Abatement policy), but you must request it.
Disaster Area Exceptions
Taxpayers in federally declared disaster areas may have extended deadlines beyond October 15. Check the IRS disaster relief page to confirm whether your filing deadline has been postponed. If you are in a covered area, document your eligibility and note the extended deadline on your return.
The bottom line: file now. Every day of delay increases your costs. A late return filed today is always better than a late return filed next month.