Filing Taxes Late in the US? 2025 Penalties Explained And How to Get an Extension

Filing taxes can feel overwhelming, especially when you're worried you've missed the deadline. But the good news is, it's not too late to act. If you're still working through your 2025 tax return, take a deep breath: there's still a way forward. With the right information and the proper tools, tax filing becomes much more manageable. Whether through expert advice or accessible digital platforms, anyone can take control of their taxes.

Key Tax Deadlines And How To File Late

Understanding the important dates is crucial for a smooth tax season and avoiding extra charges. The IRS began accepting 2025 tax returns on 27 January, with the official deadline set for 15 April.

If you've missed that window, it's vital to request an extension immediately by submitting Form 4868. You'll need to include your name, address, Social Security number or individual taxpayer identification number (ITIN), as well as an estimate of what you owe and how much you're paying. Even if you can't pay the full amount, you may still qualify for an extension. This form can be submitted via tax software, a professional preparer, or the IRS Free File service, extending your deadline to 15 October.

Alternatively, you can also obtain an extension by making a payment through Direct Pay or the Electronic Federal Tax Payment System and selecting 'extension' as your payment reason.

Note that this extension only covers your return, not the payment itself, which was due on 18 April. Missing the payment deadline may lead to interest and penalties. The failure-to-file penalty stands at 5% of unpaid taxes per month (up to 25%), while the failure-to-pay penalty is 0.5%, also up to 25%. While it's important to file on time, how you do it is up to you.

Embracing Digital Tools To File Taxes

There are several ways to file taxes, and the best one for you depends on your needs. Tax apps have grown in popularity for their ease, affordability and speed. TurboTax is a leader in the space, offering services from free basic filing to professional support packages that cost up to £286 ($389). For a more guided experience, it also provides assisted filing via live chat. H&R Block offers similar services with both free and paid options.

These platforms are especially helpful for automatically identifying applicable deductions and credits, which can increase your refund. Prefer government-backed methods? Those are available too.

Government-Supported Filing Options

If your adjusted gross income is £53,752 ($73,000) or less, the IRS Free File programme offers Guided Tax Preparation. For higher earners, Free File Fillable Forms are available. For individuals earning £49,334 ($67,000) or less, the Volunteer Income Tax Assistance programme provides free help. Seniors aged 60 and above can also access Tax Counseling for the Elderly.

For those leaning towards a more traditional method, you can still complete Form 1040 and post it to the IRS. While reliable, this method may take longer to process.

What You Need To File Accurately

Regardless of your filing method, preparation is essential. Start by collecting key documents: W-2s, 1099s for freelance or investment income, and any proof of deductions or credits. Then choose whether to file solo, with a professional, or through software. Accurately determining your filing status—single, married filing jointly, or head of household—is key, as it impacts your tax rate and eligibility for credits.

Many opt for the standard deduction, which in 2025 was £22,090 ($30,000) for joint filers and £11,045 ($15,000) for single filers. It's vital to understand the benefits of credits like the Earned Income Tax Credit (EITC) and Child Tax Credit, which can significantly reduce your tax bill. Filing is essential even if you're unsure about your obligation—you could be eligible for a refund.

How To Pay Your Taxes Efficiently

The IRS offers several payment options including bank transfers, credit cards, and digital wallets. If you can't cover your full liability, request a payment plan. Be aware that interest will accrue until your balance is cleared. Apply for a plan online or by using Form 9465.

To reduce interest, consider a credit card with 0% introductory interest. If you expect a refund, opt for direct deposit—electronic filings are usually processed within 21 days. Returns flagged for manual review may take longer, and if the IRS adjusts your return, they will contact you by mail.

Although the official extension deadline has passed, delaying further is unwise. Whether you're filing alone, with professional help, or using digital tools, the key is preparation. Gather your documents, choose the right method, and understand your eligibility for deductions and credits. Being organised and precise will help you avoid stress and maximise your refund.

Originally published on IBTimes UK