What Happens If You File Late?

December 20, 2025
Published by Gonzales Group CPA

As a small business, it’s important to be informed and stay up to date on tax filings and requirements. While it is possible to file late, there are enough penalties to make it worthwhile to file on time. An experienced San Antonio TX CPA like those at the Gonzales Group can help you stay on schedule to avoid costly penalties.

It’s important when running any business to be aware of potential penalties and risks regarding all aspects of your business and that certainly goes for tax filings. If you make a mistake or file late once, there may be some leniency, but repeated late filings will definitely cause significant problems and are best avoided.

One of the biggest issues that comes with filing late is the financial cost as the result of penalties and interest. For 2026, the failure to file results is a penalty of 5% of your unpaid taxes each month, up to 25%. On top of that, there’s a failure to file penalty of .5% per month on the unpaid balance, again up to 25%, and the interest rate for 2026 is 8% compounded daily. It also accrues even with tax payment plans.

Even if you’re due a refund, that refund can diminish due to fines and penalties. If nothing else, it delays the processing of your return and if you don’t file within three years, the IRS keeps your refund.

If you’re in need of a loan to grow your business, it’s important to have current tax returns when applying for credit or loans. Without current returns, you may be unable to qualify as you’ll be viewed as a financial liability.

Furthermore, late filings run the risk of preventing you from accessing various tax benefits. Earned Income Tax Credit, Child Tax Credit, and self-employed deductions, such as home office, health insurance, and retirement contributions, can be delayed or you may even be disqualified if you don’t file on time.

Besides the actual fines that you may have to pay on top of any taxes you may owe, these additional penalties can cause significant financial difficulties for your small business if you don’t file on time. Don’t take these risks! Contact Gonzales Group today to work with an experienced San Antonio TX CPA to ensure your taxes are filed correctly and on time. Not only will you avoid fines and penalties, we may be able to help you find additional deductions and savings, further enabling your business’s growth.

Categorised in: audit questions, Business Tips, Finance Info, What Happens If You File Late?

This post was written by Gonzales Group CPA