Your unpaid tax bill will accrue interest and penalties
But filing a tax extension doesn't mean you're off the hook for any unpaidIf you expect to have a tax bill, you're responsible for estimating the amount and paying it in full on April 15 or April 17. A tax bill is the result of underpaying taxes throughout the year; either your employer didn't withhold enough money from your paycheck to cover your taxes, or if you're self-employed, you didn't pay enough estimated quarterly taxes.
If you don't pay your tax bill in full by tax day — whether you file an extension or not — you'll pay a penalty, typically 0.5% to 1% of any unpaid tax owed at the deadline, charged each month the tax remains unpaid . On top of that, the tax bill is also subject to federal interest rates. However, the penalty is waived for taxpayers who file an extension and paid at least 85% of their tax liability throughout 2018, the
— usually it's 90%, but the threshold was lowered to account for changes in the tax-filing process under tax reform.Taxpayers who don't file a tax return or a tax extension by the April deadline will be charged a penalty of 5% of the outstanding tax bill for every month the return is late.File online for free with the IRS' e-file partners, including
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