April 18 was this year’s tax day. What happens if a taxpayer didn’t file or pay their taxes?

If the taxpayer is due a refund there is no penalty to file a late tax return.

If the taxpayer requested an extension of time to file their income tax return by the tax due date and they paid at least 90 percent of the taxes they owe, they may not face a failure-to-pay penalty. However, the remaining balance must be paid by the extended due date. Interest will be owed on taxes paid after the April 18 due date.

If the taxpayer owes tax and failed to file an extension and pay on time, they will most likely owe interest and penalties on the tax they pay late.

There are 2 penalties that may apply for late tax filing. One penalty is for filing late and the other penalty is for paying late. The penalties can add up fast and interest accrues on top of the penalties.

If a tax return is filed more than 60 days after the due date or extended due date, the minimum penalty for late filing is $205 or, if you owe less than $205, 100 percent of the unpaid tax. Otherwise, the penalty can be as much as five percent of your unpaid taxes each month up to a maximum of 25 percent.

The penalty for late payments is generally 0.5 percent of your unpaid taxes per month. This penalty can add up to as much as 25 percent of your unpaid taxes.

If both penalties apply, the maximum amount charged for the two combined penalties is 5% per month.

Even if the taxpayer can’t pay their taxes, they should file their tax return. Filing on time and paying as much as possible will keep the interest and penalties to a minimum.

The IRS offers payment plans and other options for taxpayers to pay their taxes.

To keep interest and penalties to a minimum, taxpayers should file their tax return and pay their taxes as soon as possible.