The 2025 tax season in the United States has officially ended, and with its closure, the main deadline to file your return on time has also passed. Every year, millions of people meet this tax obligation on time, but some forgetful ones are late or simply forget to send their forms.
When that happens, problems do not take long to appear: from IRS penalties to interests that keep growing... And nobody wants that. But there is a tip you should know, and it is that, even though the deadline has passed, it is still possible to act to minimize the impact. We are going to explain to you below what is the only way to prevent penalties from increasing. Let’s go.
What happens if you did not file your return on time?
Filing late does not only mean paying more taxes, but also facing penalties or fines that can increase as the months go by, and the longer you take to act, the higher the charges you will have to face.
Although it is no longer possible to completely get rid of the consequences, you can still reduce the damage. The key? File your return immediately. Each day that passes accumulates new penalties, so acting fast is, right now, your priority.
Every day counts
The IRS imposes two main types of penalties: one for not filing the return and another for not paying. Both accumulate monthly and also generate interests on the total debt, including taxes, penalties and other charges. That is why, even if you cannot pay everything owed immediately, filing your documents as soon as possible will help you, at least, to stop the accumulation of new penalties.
What options do you have if you need help?
If you feel overwhelmed by the process, remember that you can turn to tax professionals or use the free resources offered by the IRS itself through its official page. The important thing is not to stay idle, because the faster you act, the smaller the punishment you will have to face.
What are the IRS penalties?
Every year millions of penalties are imposed by the IRS, and although some seem small at first, they end up accumulating if not attended to in time, and they stop being small, of course. The most common penalties fall on those who do not file their return, pay late, or make major errors in their documentation.
How much can you end up paying?
The type of penalty varies, but here we explain the main ones:
- If you did not submit your form on time, you will face a penalty equivalent to 5% of unpaid taxes for each month (or part of a month) of delay, up to a maximum of 25%. In addition, if the delay exceeds 60 days, the minimum penalty is 510 dollars or 100% of the taxes owed, whichever is less.
- For not paying on time, the penalty amounts to 0.5% of unpaid taxes each month. Like the previous one, it can accumulate up to a cap of 25%. However, if you request a payment plan and it is approved, the percentage can be reduced to 0.25% monthly.
- On top of all this, there is also the payment of interests, which currently stand at 7% annually, calculated daily on the total amount owed, including taxes, penalties and other charges.
Combined penalty
If you fail both in filing and paying, the penalties combine, applying a total of 5% monthly (4.5% for not filing and 0.5% for not paying). The financial punishment, in this case, can reach up to 47.5% of the original taxes if it is not corrected in time.
Is it possible to reduce or eliminate IRS penalties?
Although it sounds complicated, the good news is that the IRS is willing to consider penalty reductions in certain cases. If you have a positive compliance history, you could request a forgiveness under the “First Time Penalty Abatement” program.
| Type of Penalty | Monthly Rate | Maximum Limit | Extra Details |
| Late Filing | 5% of unpaid taxes for each month (or part of a month) | Up to 25% of the unpaid taxes | If you’re more than 60 days late, you’ll pay at least $510 or 100% of what you owe — whichever is less. |
| Late Payment | 0.5% of unpaid taxes for each month (or part of a month) | Up to 25% of the unpaid taxes | If you set up an approved payment plan, the rate drops to 0.25% per month. |
| Interest on Unpaid Taxes | 7% annual rate, compounded daily | No limit | Interest keeps adding up daily on your total debt — including taxes, penalties, and any fees. |
| Combined Penalty (Late Filing + Late Payment) | 5% per month (4.5% for filing + 0.5% for payment) | Up to 47.5% of the unpaid taxes | If both penalties apply in the same month, the filing penalty is reduced by the payment penalty. |
