If you file your U.S. tax return late, you may face two primary penalties: the late filing penalty and the late payment penalty.
The late filing penalty is 5% of the unpaid taxes for each month or part of a month that your return is late, up to a maximum of 25%. If your return is more than 60 days late, the minimum penalty is $485 or 100% of the unpaid tax, whichever is less.
The late payment penalty is 0.5% of the unpaid taxes for each month or part of a month that the taxes remain unpaid, up to a maximum of 25%. If both the late filing and late payment penalties apply in the same month, the combined penalty is capped at 5% per month, with the late filing penalty reduced by the amount of the late payment penalty.
Interest on unpaid taxes will also accrue from the original due date until the taxes are paid in full. However, there is no penalty for filing late if you are due a refund, as long as you file within three years. Filing for an extension gives you more time to file, but does not extend the time to pay any taxes owed.
In some cases, you may be eligible for penalty relief if you have a reasonable cause for filing late or if it is your first time missing the deadline. Filing and paying as soon as possible after missing the deadline can help minimize these penalties and interest charges.