Missed the Tax Deadline? Steps to Take Now to Minimize Penalties and Interest?

You’re not alone if you missed this year’s April 15 tax filing deadline. Millions of Americans find themselves in this position each year, for reasons ranging from simple oversight to life events. 

While the IRS imposes penalties for unfiled taxes and delinquent filing, it’s not too late to deal with the situation. Tax professionals emphasize that addressing it promptly can minimize consequences and open pathways to resolution. Below, they detail specific steps to take if you’re among those who missed the deadline.

 

What Happens if You Miss the Tax Deadline?

When you miss the tax deadline, interest accrues on your unpaid balance and compounds daily from April 15 until you pay the balance in full. 

The interest rate on underpayments of tax is set each quarter. It’s 7% for the quarter beginning April 1, 2025. 

In addition to interest charged on any tax due, you could face separate penalties for filing and paying late. 

The late filing penalty is 5% of the tax due each month (or part of a month), and your return is late (tax filing extensions are factored in). The maximum penalty is 25% of your unpaid taxes. 

The late-payment penalty is 0.5% of the unpaid balance for each month (or part of a month), and the tax isn’t paid.

The rate jumps to 1% ten days after the IRS issues a final notice of intent to levy or seize property. However, the penalty is only 0.25% for each month, or part of a month, in which an IRS installment agreement is in effect. 

Overall, the penalty can be as high as 25% of the unpaid tax. As you can see, the longer you wait, the higher the penalties grow. 

 

 

Can you avoid penalties for missing the tax deadline? 

 If you miss the tax deadline and have a good explanation, you might be able to avoid the penalties (but not interest).

What’s a “good” reason for missing the tax deadline?
Think fire, natural disaster, serious illness, and the like. 

But note: A lack of funds, in and of itself, is not a sufficient reason for failing to file or pay your federal income taxes on time, although the underlying reason for your lack of funds might satisfy the IRS. If you want to request a penalty waiver, attach a statement to your return fully explaining your reason for filing or paying late. 

 

What if you are supposed to get a tax refund?

If you are confident that you are due a tax refund, then there is no reason to worry. The IRS doesn’t penalize taxpayers for filing a late return if they are receiving a refund.  

Some people who are fined because they miss the tax filing and payment deadline may qualify for penalty relief from the IRS. 

If you are penalized, contact the IRS by calling the number on your notice and explain why you couldn’t file and/or pay on time. They may give you a break if you have a good reason, like your house caught on fire, you were seriously ill, etc. 

If you have a history of filing and paying on time, you may qualify for relief under the IRS’s “first-time penalty abatement” policy. 

Typically, to have your penalty waived under this policy, you must have filed and paid your taxes on time for the past three years. There are other requirements that you must satisfy as well. 

 

File Your Taxes with Tax1099’s EFTPS Service

Tax1099’s EFTPS service offers a convenient and secure way to file your taxes online. With the Electronic Federal Tax Payment System (EFTPS), you can easily make federal tax payments directly from your bank account. This service ensures that your payments are processed quickly and accurately, helping you avoid the hassle of paper checks and manual submissions. Whether you’re filing quarterly estimated taxes, payroll taxes, or annual returns, Tax1099’s EFTPS service simplifies the process, allowing you to focus on what matters most. 

 

Steps to Make IRS Tax Payments with Tax1099

Steps to pay your federal tax payments using Tax1099:

Step 1: Gather Info to Enroll Yourself 

Gather the following information:

• Taxpayer Identification Number i.e. Employer Identification Number (EIN) or Social Security Number (SSN)  
• Bank account details  
• Address and name as they appear on your IRS tax documents

If you haven’t already enrolled, select the option ‘Add Enrollment’ and fill in the required details. If you want to pay individual taxes or pay taxes for a business, select individual or business, respectively.

  

Step 2: Enter Taxpayer Details  

Follow the prompts, enter your details, and proceed. Enter your employer identification number or social security number, the four-digit PIN you received in the mail, and the banking information you used during enrollment.

  

Step 3: Verify the Details  

Select the tax form, payment type, tax period, and amount (and subcategory information, if applicable). Tax1099 allows you to schedule your payments 365 days (1 year) prior so you can stay stress-free and avoid any penalties or interest.

Verify all the details.

  

Step 4: Make your Payment

When you enroll in EFTPS, you can select the payment method as EFTPS Direct. This method instructs EFTPS to move the funds from your account to the Treasury’s account on the date you designate. Select the Automated Clearing House (ACH) Debit method on the enrollment form.

Select the date you want your payment to be received.

Keep in mind that you should schedule your tax payment at least one business day prior to your tax due date, before 8:00 pm ET.

  

Step 5: Get Notified upon payment confirmation

Follow the screens through the process. Once accepted, you’ll get an EFT Acknowledgment Number as your receipt. You will also receive your payment confirmation through email.

 

As an IRS-authorized eFiling platform for 1099, W-2, and 94X forms, Tax1099 recognizes the value of efficiency in tax information reporting in today’s fast-paced world. Offering the ‘Tax1099 EFTPS Solution’, the platform is ideal and secure for both business entities and individuals looking for a convenient way to pay their federal tax obligations.