Owed a refund? There's no penalty for filing late

Written By limadu on Senin, 14 April 2014 | 08.36

taxes late filing

If you're owed a refund and you can't file your taxes by April 15th, you won't get hit with a penalty.

NEW YORK (CNNMoney)

This has always been the case, but many people don't realize it. The IRS is chomping at the bit to get its tax revenue. It's less concerned about doling out refunds to people who haven't claimed them yet.

So if you are absolutely sure you're owed a refund, you won't get in trouble if you miss the filing deadline.

Related: 'How I'm using my tax refund'

But if you're wrong and you actually owe money, you'll need to fork over a fine. By both failing to file and failing to pay on time, you will incur a maximum penalty of 5% for each month after the deadline. If you're more than 60 days late, you'll be fined $135, or 100% of the unpaid tax -- whichever amount is smaller.

To avoid even the chance of being hit with these penalties, it's always safer to file on time. Or you can file for a six-month extension if you're feeling pressed for time -- which simply requires filling out Form 4868. But remember, even if you get an extension, you still have to pay 90% of the tax owed by the filing deadline.

Related: 7 most common tax mistakes

"Filing by the April deadline can save you from an unexpected surprise," says Lynn Ebel, tax attorney at the Tax Institute at H&R Block. "If you wait to file ... because you 'know' you are getting a refund and then find that you miscalculated and actually owe money, interest and penalties will have accrued on your debt [by the time you do file]."

And if you wait too long, your refund will become the property of the government. After three years, you can no longer claim a refund. This year, the IRS announced that more than 900,000 people still haven't claimed refunds worth a total of $760 million from 2011. After April 15, they can no longer retrieve the funds. To top of page

First Published: April 13, 2014: 12:06 PM ET


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