Last-Minute Tax Panic? Here’s What You Need to Do Now
The April 15, 2025, tax deadline is approaching fast, yet millions of Americans still haven’t filed their returns. If you're one of them, don’t panic—you still have options. Whether you need more time, aren’t sure if you have to file, or just keep putting it off, here’s what you need to know to get your taxes done on time (or avoid penalties if you can’t).
Download your free guide to mastering taxes in retirement today!
1. Do You Need to File? Check the Rules
Not everyone is required to file a tax return. If your income is below a certain threshold, you may not have to file at all—but you might be leaving money on the table. Here’s a quick breakdown of filing requirements for 2025:
If your income falls below these thresholds, you don’t have to file. But if you had any taxes withheld from your paycheck, you should still file to get a potential refund.
2. How to File (Even Last-Minute)
If you haven’t started your taxes yet, here’s what you can do:
File electronically – The fastest and most efficient way to file. Use tax software or the IRS Free File tool if your adjusted gross income (AGI) is $84,000 or less. Filing electronically also speeds up refunds, typically within three weeks.
Use IRS Direct File – If you qualify, you can file directly with the IRS for free. This option is available in 25 states and works for taxpayers with simple returns who receive a W-2, SSA-1099, 1099-G, or 1099-INT.
Hire a tax professional – If your taxes are complicated, a CPA or enrolled agent can help. Appointments fill up quickly in April, so act fast.
Mail a paper return – You can still file by mail, but it takes six to eight weeks to process. If you owe money, your return must be postmarked by April 15 to avoid penalties.
Request an extension – Need more time? File Form 4868 to get a six-month extension. However, you must pay any estimated taxes owed by April 15 to avoid interest and penalties.
3. What If You Need More Time?
You can push your filing deadline to October 15, 2025, by requesting an extension. However, this only extends the time to file, not the time to pay. If you owe taxes, you must estimate the amount and pay by April 15 to avoid penalties and interest.
How to Request an Extension:
File Form 4868 – Use the IRS Free File tool, tax software, or a tax professional to submit your extension request.
Make a payment – Pay some or all of your estimated tax bill when you file for an extension. This reduces interest and penalties.
Get a refund if you overpay – If you pay more than you owe, you’ll get a refund when you file your actual return.
An extension helps if you need more time to gather documents, but it won’t stop late payment fees if you owe taxes.
4. What Happens If You Miss the Deadline?
If you miss the tax filing deadline and owe taxes, the IRS will apply penalties and interest that increase the longer you wait.
Failure-to-File Penalty
5% of unpaid taxes per month (or part of a month)
Maximum penalty: 25% of your unpaid tax bill
If you file 60+ days late, the minimum penalty is $435 or 100% of your tax due, whichever is lower
Failure-to-Pay Penalty
0.5% of unpaid taxes per month
If taxes remain unpaid after receiving an IRS notice, the penalty increases to 1% per month
Maximum penalty: 25% of the unpaid amount
Interest Charges
Accrues daily on unpaid taxes
Based on the federal short-term interest rate plus 3%
Continues to grow until the balance is paid in full
Even if you can’t pay your full tax bill, filing on time can reduce penalties. If you're struggling to pay, you may qualify for an IRS payment plan or request penalty relief in certain situations.
5. Common Reasons People Haven’t Filed Yet
Many taxpayers delay filing for various reasons. Here’s why:
Procrastination – Some put off filing until the last minute, overwhelmed by the process or unsure where to start.
Complicated tax situations – Self-employed individuals, freelancers, and investors often need extra time to track income, expenses, and deductions. Those with rental properties, stock trades, or multiple income sources may also require more time.
Waiting for documents – Some taxpayers don’t receive necessary forms (like 1099s, K-1s, or corrected W-2s) until late, delaying their ability to file accurately.
Natural disasters – If you live in an IRS-declared disaster area, you may qualify for an extended deadline. Check the IRS website for details on your location’s relief options.
Unexpected life events – Major changes like illness, divorce, job loss, or a death in the family can push taxes to the back burner.
Owing money – Some delay filing because they know they’ll owe and want to avoid making a payment. However, penalties and interest can add up quickly.
Download your free guide to mastering taxes in retirement today!
6. How to Avoid Tax Season Stress Next Year
If tax time always sneaks up on you, make filing easier next year:
Set reminders: Mark key dates on your calendar (January for gathering documents, February to start filing, April for the deadline).
Keep records organized: Store W-2s, 1099s, and other tax forms in one place.
Adjust withholdings: If you always owe, consider adjusting your W-4 form so more tax is taken from your paycheck.
Use estimated payments: If you’re self-employed, make quarterly tax payments to avoid a large bill at year-end.
Maximize Your Tax Refund with Deductions and Credits
Don't overlook possible tax deductions or credits that could boost your refund or lower your tax bill. Here’s a quick summary:
Tax credits – Reduce your tax bill dollar for dollar; some are refundable, meaning you can get money back even if you owe nothing.
Tax deductions – Lower your taxable income, reducing the amount of tax you owe.
Standard vs. itemized deductions – Choose the option that lowers your taxable income the most.
Common deductions – Student loan interest, business expenses, charitable donations, and certain medical expenses.
Popular tax credits – Earned Income Tax Credit (EITC), Child Tax Credit, and education-related credits.
Filing correctly – Research eligibility for deductions and credits to avoid overpaying taxes.
The Bottom Line
If you haven’t filed yet, don’t wait any longer. File electronically to get your refund faster, or request an extension if you need more time. If you owe money, pay what you can now to avoid penalties. Next year, plan ahead to make tax season easier.
Download your free guide to mastering taxes in retirement today!
Want help filing? Visit the IRS Free File website or consult a tax professional today.
Reference
Investopedia. (n.d.). Tax Day definition. Retrieved from https://www.investopedia.com/tax-day-definition-5116810.
Internal Revenue Service. (2025). Get ready for tax filing season 2025. Retrieved from https://www.irs.gov/newsroom/get-ready-for-tax-filing-season-2025.
Internal Revenue Service. (2025). Tax time guide: 2025 essentials needed for filing a 2024 tax return. Retrieved from https://www.irs.gov/newsroom/tax-time-guide-2025-essentials-needed-for-filing-a-2024-tax-return.
Investopedia. (n.d.). How to get the most money back on your tax return. Retrieved from https://www.investopedia.com/financial-edge/0312/how-to-get-the-most-money-back-on-your-tax-return.aspx.
United States Code. (2025). 26 U.S. Code § 6651 - Failure to file tax return or to pay tax. Retrieved from https://uscode.house.gov/view.xhtml?req=(title:26%20section:6651%20edition:prelim)%20OR%20(granuleid:USC-prelim-title26-section6651)&f=treesort&edition=prelim&num=0&jumpTo=true.
Economic Times. (2025). Big worry for Donald Trump as Tax Day approaches: IRS data shows millions of Americans have not filed their income tax returns. Retrieved from https://economictimes.indiatimes.com/news/international/us/big-worry-for-donald-trump-as-tax-day-approaches-irs-data-shows-millions-of-americans-have-not-filed-their-income-tax-returns/articleshow/119597208.cms?from=mdr.