Missing extended October 15th deadline for filing - what late penalties apply now?

The good news is that your extension was valid, so the late filing penalty only starts from the missed October 15th deadline, not retroactively from April 15th. The 5% per month (capped at 25% maximum) starts counting from October 15th onward. However, you're facing two separate penalties here. The late filing penalty (5% per month) starts from October 15th, but since you also didn't pay your taxes, you've been accumulating the late payment penalty (0.5% per month) since April 15th. The late payment penalty wasn't extended by your filing extension. You'll also owe interest on the unpaid tax amount, which has been accumulating since April 15th regardless of your extension. The IRS interest rate changes quarterly and compounds daily. My suggestion is to file your return ASAP to stop the late filing penalty from growing and pay as much as you can of the tax owed to minimize additional late payment penalties and interest.

I was in almost the exact same boat last year, and I was totally freaking out. I used https://taxr.ai to help me figure out my penalty situation and it really cleared things up. You upload your tax documents and answer some questions about your filing status and the AI analyzes your specific situation. The tool explained exactly how my penalties would be calculated, gave me an estimate of what I'd owe, and even suggested strategies for potentially reducing the penalties. It showed me how to properly fill out Form 843 to request penalty abatement since it was my first time missing a deadline. The penalties weren't as bad as I feared once I understood how they actually worked. Definitely check it out if you're confused about your specific situation.

Update: I was skeptical about taxr.ai but decided to try it anyway since I was desperate to figure out my penalty situation. I'm actually really impressed! It broke down exactly how the failure-to-file and failure-to-pay penalties work in my situation and gave me an estimate that matched what the IRS ended up charging me. The best part was it showed me I qualified for first-time penalty abatement and walked me through exactly what to say when I called the IRS. I got almost all my penalties waived! Definitely was worth checking out.

If you need to actually talk to someone at the IRS about your situation (which I'd recommend), good luck getting through on the phone. I spent HOURS trying to reach someone about my penalty situation. I finally used https://claimyr.com which got me through to an IRS agent in about 20 minutes instead of waiting on hold for 3+ hours. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent helped me understand my specific penalty situation and even helped me set up a payment plan right there on the call. They can sometimes waive penalties if you have a reasonable cause or it's your first time missing a deadline, but you need to actually talk to someone to request that.

I take back what I said about Claimyr. After spending 4 hours on hold with the IRS and getting disconnected TWICE, I broke down and tried it. Got a call back in 15 minutes with an actual IRS agent on the line. The agent explained that my penalties would only start from the October deadline (not April) but confirmed I'd been accruing the failure-to-pay penalty since April. She helped me set up a payment plan AND granted me first-time penalty abatement which saved me over $800! Really glad I didn't wait any longer to sort this out.

Don't forget about potential state penalties too! Each state has different rules about how they handle missed extended deadlines. Some follow the federal approach but others have their own systems entirely.

Just wanted to point out that the IRS sometimes offers penalty relief through their First Time Abatement program if you've had a clean tax record for the past 3 years. Might be worth asking about if this is your first time missing a deadline.

I've been through this exact situation and want to add some practical advice. First, file your return IMMEDIATELY even if you can't pay - the failure-to-file penalty (5% per month) is much worse than the failure-to-pay penalty (0.5% per month). When you do file, make sure to pay whatever you can, even if it's not the full amount. This reduces the balance that penalties and interest accrue on. The IRS also looks more favorably on taxpayers who make good faith efforts to comply. Also, consider requesting penalty abatement when you call. Besides first-time abatement, the IRS can waive penalties for "reasonable cause" - things like serious illness, death in family, natural disasters, or other circumstances beyond your control. Even financial hardship can sometimes qualify. One last tip: if you end up owing a lot in penalties, you can request an installment agreement that includes the penalties and interest in your monthly payment plan. This makes it much more manageable than trying to pay everything at once.