If you're American and you still haven't completed one of your mandatory procedures, pay attention. Social Security (SSA) along with the IRS have made it clear that there's a risk if you miss the deadline.
The truth is that you could face fines and interest charges, but there are solutions like IRS Free File, Fillable Forms, and extensions that you should know about now. SSA isn't directly involved in requiring your filing, but they do receive the W‑2 forms that employers must submit. This means that if you don't file, it's easy for the IRS to identify you and apply penalties.
Strong statement from SSA and IRS: don't risk your filing
The IRS has insisted that all Americans must comply with their 2024 federal tax return. Those who requested an extension have until October 15, 2025 to file without additional penalty. Requesting the extension is simple: you use IRS Free File to complete and submit Form 4868.
IRS Free File is a free service that allows you, if your adjusted gross income (AGI) was $79,000 or less in 2023, to use commercial software to prepare and submit your federal return at no cost.
If your AGI was higher, you can still use Fillable Forms, which are electronic versions of IRS forms that guide you through the process. Among the highlighted advantages are: 24/7 access, ease of use, security, and the possibility to also make payment if you owe taxes.
Steps to take to avoid fines
First, find out if you qualify for IRS Free File based on your AGI. If you do, go to the IRS website and choose a partner to fill out your return with guidance. If your income was higher, use Fillable Forms.
If you're not ready to file, request an extension using the Free File software. Be careful: the extension only extends the deadline to file, not to pay. If you owe money and don't pay, you'll accrue interest and possibly penalties.
Penalties and alternatives if you're late
If you didn't file your return or request an extension on time, you'll face a late filing penalty. It's 5% of the tax owed for each month or part thereof, up to a maximum of 25%.
In addition, there is compound interest on the tax owed from April 15. The recommendation is clear: as soon as you can, file your return, even if it's late, because the longer you wait, the higher the charges will be.