Tax deadlines can sneak up on even the most organized business owners. With the daily responsibilities of running a business, it’s easy to lose track of dates—especially during busy seasons. If you’ve missed a tax deadline, don’t panic. While it’s not ideal, there are clear steps you can take to minimize penalties, get back on track, and avoid further issues with the IRS.
At Shammas Tax, we understand that life and business can get messy. That’s why we want to break down exactly what to do if you find yourself in this situation.
Step 1: Don’t Ignore the Missed Deadline
The worst thing you can do is ignore the fact that you missed a deadline. Whether it was for filing your return, paying taxes owed, or submitting quarterly estimated payments, ignoring it won’t make the problem go away. In fact, delays can increase penalties and interest, which will only cost you more in the long run.
Start by identifying exactly which deadline you missed. Was it your annual tax return? A quarterly payment? A payroll filing? Knowing what was missed will help determine your next steps and the potential consequences.
Step 2: File as Soon as Possible
If you missed the deadline to file your return, do it immediately. The longer you wait, the higher the failure-to-file penalty becomes. The IRS typically charges 5% of the unpaid taxes for each month (or part of a month) that a return is late, up to a maximum of 25%.
If you don’t owe taxes and are expecting a refund, you won’t face a penalty—but you should still file promptly. Refunds have a statute of limitations, meaning you only have three years to claim the money.
If you do owe taxes, filing now—even if you can’t pay in full—helps reduce penalties. You can always explore payment options once your return is submitted.
Step 3: Pay What You Can
If you missed a deadline that included a tax payment, try to pay as much as you can as soon as possible. The IRS charges both interest and penalties on unpaid balances, so every dollar paid now reduces those extra costs.
Even if you can’t pay the full amount, making a partial payment shows that you’re taking the issue seriously. After that, you can work with the IRS to arrange a payment plan.
There are a few common options:
- Short-term payment plan (up to 180 days) if you can pay off the full amount relatively soon.
- Long-term installment agreement if you need more time.
- Offer in compromise for those experiencing serious financial hardship, allowing you to settle your debt for less than the full amount owed.
Step 4: Contact the IRS or Your Tax Professional
If you’re unsure how to proceed or feel overwhelmed, don’t try to handle everything alone. Contact the IRS or a tax professional to get guidance.
Calling the IRS directly can help you get information about your account and any outstanding balances. They may also assist you in setting up a payment plan or correcting your records.
Working with a tax expert, like those at Shammas Tax, can help you avoid missteps. A professional can communicate with the IRS on your behalf, clarify your responsibilities, and ensure your paperwork is accurate.
Step 5: Be Prepared for Penalties and Interest
Even if you resolve the issue quickly, you’ll likely still face penalties or interest—especially if you owe taxes. These fees can add up quickly:
- Failure-to-file penalty: Usually 5% of the unpaid tax per month (up to 25%).
- Failure-to-pay penalty: Usually 0.5% of the unpaid tax per month, also capped at 25%.
- Interest: Charged on both the unpaid tax and the penalties, and it compounds daily.
While frustrating, these charges are part of the IRS’s enforcement process. Being proactive and making arrangements to pay as soon as possible is the best way to reduce these costs.
Step 6: Correct Any Mistakes
Sometimes, tax deadlines are missed because of inaccurate records or overlooked details. Take this opportunity to double-check your financial information.
- Review income, expenses, and deductions.
- Make sure you’ve categorized transactions correctly.
- Confirm that you have all required documentation.
Clean records will not only help you resolve your current issue but also make future tax filings easier and more accurate.
Step 7: Adjust Your Process for Next Year
Missing a tax deadline is stressful—but it’s also a learning opportunity. Use this experience to improve how you handle tax responsibilities in the future.
Here are a few strategies to help:
- Set calendar reminders for key IRS deadlines, such as quarterly payments and return filing dates.
- Use accounting software that alerts you to due dates and helps track payments.
- Work with a tax preparer or accountant year-round, not just during tax season.
- Stay organized with receipts, bank statements, and financial documents.
Having a reliable system in place reduces your chances of missing future deadlines and helps you feel more confident and in control of your finances.
Step 8: Know When to Ask for Penalty Relief
In certain situations, the IRS may reduce or remove penalties if you can show reasonable cause.
You may qualify for penalty relief if:
- You have a history of timely filings and this is your first mistake.
- You experienced circumstances beyond your control, such as a natural disaster, serious illness, or system error.
You’ll need to provide documentation and a written explanation when requesting penalty relief. While there’s no guarantee, it’s worth exploring—especially for first-time offenders.
Final Thoughts
Missing a tax deadline can feel overwhelming, but it’s not the end of the world. The key is to act quickly, stay organized, and seek support if you need it.
At Shammas Tax, we’ve helped many small business owners recover from late filings and regain control of their tax situation. Whether it’s correcting missed deadlines or setting up a better process for the future, our goal is to make tax compliance less stressful.
Mistakes happen—but how you respond makes all the difference. Take the steps outlined here, and you’ll be back on track before you know it.
