Remember Your Tax Extension? Here's Why You Can't Miss the Oct. 15 Deadline
A tax extension automatically grants you six months to complete your tax return. If you requested an extension for your 2025 federal income tax return, the Oct. 15 deadline is suddenly right around the corner. Missing it could cost you a significant amount of penalties and interest, especially if you still owe money.
Here’s what happens if October comes and goes and the IRS still doesn’t have your tax return.
Be Smart: I'm an Estate Planner: 7 Costly Trust and Tax Mistakes Even the Ultra-Wealthy Make
Get Weird: 11 Unusual Ways To Make Extra Money (That Actually Work)
The Late-Filing Penalty
If you don’t meet the extended filing deadline, the IRS will assess a failure-to-file penalty of 5% of your unpaid tax balance for every month or partial month, that your return remains unfiled. This penalty is capped at 25%.
Looking at the late-filing penalty alone, if you don't file your return on time and owe $3,000 in taxes, you could face a $150 penalty for the first month that you're late.
If you wait five months after the extension deadline, that penalty could jump to $750. At a minimum, you’ll owe $525 or 100% of the unpaid tax, whichever is less, as soon as your return is more than 60 days late, per the IRS minimum late-filing penalty rules.
That's a potentially hefty price to pay for missing a filing deadline.
The Late-Payment Penalty
Missing the tax extension deadline can trigger not just a failure-to-file penalty, but also a failure-to-pay penalty, if you didn’t pay your tax bill in full by April 15.
The automatic six-month extension the IRS grants you to file your return doesn’t absolve you from making your payments by the original due date. Waiting until Oct. 15 to pay will also tack on additional IRS penalties of 0.5% of your unpaid taxes for every month or partial month, that the balance remains outstanding. This penalty also maxes out at 25%, just like the late-filing penalty.
If both the failure-to-file and the failure-to-pay penalties apply during the same month, the IRS reduces the late-filing penalty to 4.5%, bringing the combined monthly penalty to 5%. Interest on unpaid taxes is charged separately, and it compounds daily, per the IRS.
What if You're Owed a Refund?
You can generally avoid that late-filing penalty if the IRS owes you money instead of the other way around. You still need to file in a timely manner, however, as the IRS has a time limit on claiming refunds. Generally, you must claim the refund within three years of filing your return or two years from paying the tax, whichever is later, although certain exceptions can give you additional time.
How To Qualify for Penalty Relief
The IRS isn’t generally in the business of waiving penalties, but if you do miss the tax-filing deadline, you might still be able to catch a break.
In July 2026, the IRS announced a new Automatic Exemption from Penalty program. As long as you’ve filed your returns and paid your taxes on time for the previous three years, you may automatically qualify for relief. If granted, you won’t have to pay certain late-filing and late-payment penalties, starting with 2025 tax returns.
If you don't qualify for automatic relief, the IRS may waive certain penalties for reasonable cause, such as a serious illness or natural disaster.
What if You Still Can't Pay Your Taxes?
If you can’t afford to pay your taxes, filing your return as soon as possible can still help you avoid additional penalties. For your outstanding balance, you can likely set up an installment agreement with the IRS so you can pay what you owe over time. You’ll still accrue interest per IRS rules, but if you filed on time and have an approved payment plan, the late-payment penalty drops from 0.5% to 0.25% per month.
You’re not completely out of options if you miss the Oct. 15 extension deadline. Penalties and interest can increase the amount you owe, however, unless you take action and deal with the IRS directly.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion: