After storms inundated California in early 2023, the IRS and state Franchise Tax Board gave most taxpayers in the state until mid-November to file their returns and pay what they owe.
After storms deluged California in early 2024, the IRS and Franchise Tax Board gave San Diego County taxpayers until mid-June to file their returns and pay what they owe. For everyone else in the state, Monday remains the filing deadline — at least for now.
If you don't pay at least a significant portion of your 2023 taxes by then, you'll automatically be penalized, even if you file for an extension by Monday night.
Tax experts say the best course of action is to file your returns on time and pay everything you think you owe. The IRS, nonprofit groups, and commercial tax preparation companies offer multiple ways to prepare and file returns for free online.
If you can't afford your tax bill, you have some choices to make by Monday at 11:59 p.m., when the deadline comes.
There is a chance that President Biden will approve Governor Gavin Newsom's request for a major disaster declaration covering Los Angeles, Ventura, Butte, Glenn, Monterey, San Luis Obispo, Santa Barbara, Santa Cruz and Sutter counties by the end of Monday. This may lead to delays in tax filing deadlines. However, relying on a last-minute deferral is a high-risk gamble, depending on how much you owe in taxes for 2023.
What are the penalties for not submitting?
Tax experts say that if the IRS owes you a refund, you won't face a penalty for not filing your tax return. Instead, you'll have a different deadline: If you wait more than three years to file your return for that year, you'll sacrifice your claim for money.
If you have taxes due, Andy Phillips, director of the Tax Institute at H&R Block, said it's important to file your return or file for an extension on time, even if you can't cover the balance right now. This is because the penalty for not filing is at least as bad as the penalty for not paying.
The IRS will charge you 5% of what you owe each month until you file, with a maximum penalty of 25%, Phillips said. But it also charges interest, and there's no cap on the amount of interest you'll owe. Currently, the interest rate is 8%, compounded daily.
The Franchise Tax Board penalty is 5% per month, up to a maximum of 25%; State tax law does not mention interest charges. It also imposes a lower penalty on people who owe no more than $540.
Both the feds and state provide hardship exceptions.
Do you need more time to collect your papers? Both the IRS and Franchise Tax Board offer six-month extensions in the annual return filing deadline for anyone who files.
However, there's a catch: Even with the extension, you'll still face an underpayment penalty if you don't pay at least 90% of the amount you owe by the end of Monday, Phillips said. But at least you won't be subjected to the additional penalty for not submitting the application.
What are the penalties for non-payment?
Just like the penalty for not filing a return, the IRS charges 5% per month for failure to pay the balance, up to a maximum of 25%, plus interest. The Franchise Tax Board imposes the same penalty, with interest currently at 8%.
The IRS only applies a penalty if you pay less than 90% of the amount you owe by the deadline, Phillips said. If you're facing a penalty, you need to think about how to balance that amount (including interest) with the cost of taking out a loan, using your credit cards, or withdrawing cash from savings or profitable investments, he said.
One option is to enter into a payment plan with the IRS, which will cut the underpayment penalty in half — although you'll still pay interest on the amount you owe while you take down your balance, Phillips said. As long as you comply with the plan, the IRS won't go into forced collection mode, he said.
You can apply for a payment plan with the IRS through the agency's website.
The Franchise Tax Board also offers installment plans that allow you to pay off your tax debt over time, usually three to five years. The plans are only available to taxpayers who owe less than $25,000 and who have filed all required returns in the past five years. Applications are accepted online, by mail, or by calling (800) 689-4776.
How does the IRS collect penalties?
Regardless of whether you file a return or not, the IRS and Franchise Tax Board will collect data from your employers, banks, mutual funds and other sources about your income and tax payments. They will use this information to calculate what they think you owe (or what they owe you). They won't automatically refund the overpayment — you won't get that unless you file a return — but they can force you to pay taxes you underpaid.
The IRS usually starts by sending you a letter asking you to pay, Phillips said. If you don't, they can seize part of your paycheck, Social Security benefits, and your investments. As a last resort, he could put a lien on your home and force it to be sold, he said.
To avoid getting into a collections process, you might offer to pay a compromise amount — for example, if you can prove you're not responsible for the underpayment, Phillips said. He said the feds only accept a small percentage of applications for this type of relief; The agency will likely put you on a payment plan or temporarily suspend collection efforts until your income grows. If you find yourself in the latter category, you'll face ever-increasing interest charges on your unpaid tax debt.
Consumer advocates warn taxpayers to be careful about hiring anyone who promises they can reduce your tax debt, because many of these offers come from scammers. “Make sure you do your homework on who you're dealing with,” Phillips agreed.
Where can I get last-minute help from the IRS?
The following Federal Taxpayer Assistance Centers will be open Saturday from 9 a.m. to 4 p.m.:
300 N. Los Angeles St., Los Angeles, CA 90012501 W. Ocean Blvd., Long Beach, CA 90802880 Front St., Suite 1247, San Diego, CA 92101212 Coffee Road Suite 200, Bakersfield, CA 933092525 Capitol St., Fresno , CA 937211301 Clay St., Oakland, CA 94612450 Golden Gate Ave., San Francisco, CA 9410255 S. Market St., Suite 100, San Jose, CA 951134330 Watt Ave., Sacramento, CA 95821
The agency stressed that although IRS employees will be willing to provide personal assistance with questions and account issues, they will not prepare your taxes for you. He also suggested that you come with two types of ID (including a government-issued photo ID), the Social Security or taxpayer ID numbers for everyone in your household, and any notices or mailings the IRS has sent you.
If you have a question about a tax return you've already filed, be sure to bring a copy with you.
