If you don't file your Form 1040 by the deadline, you will be held liable for a penalty of 5% per month until you file your returns. The 5% penalty will be added each month up to five months for a maximum limit of 25 percent.
After the 25 percent limit, you will accumulate interest charges until the balance is paid, which can be very costly over time.
The good news is that if for some reason you can't file by the deadline, you can put off filing your Form 1040 until October by getting an extension using Form 4868.
The most important thing is to file even if you don't have the money to pay. You can make arrangements with the IRS to pay the amount you owe in installments for up to 60 months. You will be charged interest but you won't get hit with a failure to file penalty.
•Many taxpayers make the mistake of not filing by the deadline because they don't have the money at the time. Getting hit with a failure to pay penalty makes things worse. You should file or get an extension by the filing deadline.
An alternative you may want to think about is using a credit card. Although using a credit card to pay your tax bill may not seem like a wise idea, it may save you money in the long run. The money you will have to pay the IRS in penalties and interest for filing late may add up to more than what the costs of using a credit card might be over time.
It is a wise idea to file your returns on time or get an extension. It could get very costly if you don't.