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About 19 million U.S. taxpayers requested an extension to file back in April, according to the IRS, giving them an extra six months to submit their 2023 federal income tax returns. For many of those taxpayers, the October 15 final deadline is fast approaching. Taxpayers in federally-declared disaster areas, which currently cover all or parts of 25 states and several U.S. territories, will have even more time. Eligible taxpayers will receive an automatic extension to file their 2023 federal returns, with new deadlines ranging from November 1 to as late as May 1, 2025, depending on where they live. Check the IRS database to find out if you may qualify for an automatic federal extension, and reach out to your state about next steps for your state return.

From hurricanes to tornadoes and wildfires, these natural disasters occurred after the April 15 federal tax deadline, when tax returns and payments were due. So affected taxpayers who originally requested an extension will have more time to file, but not more time to pay, according to the IRS.

Penalties can add up

For most taxpayers who requested an extension, but don't file their return by October 15, the penalty for filing the return late is 5% of unpaid taxes per month or partial month, capped at 25%. If you didn't pay enough tax by April 15, the late payment penalty is 0.5% of your unpaid balance per month or partial month, up to 25%. You will also incur an interest-based penalty. You won't be penalized if you're owed a refund. Taxpayers can avoid or limit penalties by filing for an extension, estimating what they owe and making payments toward that balance before April 15 and in subsequent months, experts say. Then "there's no failure-to-file penalty because they have an extension, or the underpayment penalty gets significantly reduced because they have had extra payments done throughout the year," said certified public accountant Miklos Ringbauer, founder of MiklosCPA, an accounting and tax strategy firm in Los Angeles.

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