Your extension gave you six months to file. Zero to pay.

October 15 is 12 days out. If you filed a Form 4868 extension, here’s the surprise most people miss: the extension only moved the paperwork date. Interest on anything you owe has been adding up since April 15 — and filing late can potentially cost you about ten times what paying late costs. The one move that matters: file even if you can’t pay.

October isn’t a month right now. It’s a countdown. If you filed Form 4868 back in April — or paid and marked it as an extension payment — you have until October 15, 2026 to file your 2025 individual return. (For most people. Disaster-area, combat-zone, and some overseas filers can have different deadlines.) The IRS is explicit about what the extension bought you: “An extension of time to file is not an extension of time to pay.” The extension was six months to file. Zero months to pay.

The interest that’s been running since April

The IRS sets its underpayment rate every quarter, and it’s 7% a year, compounded daily, right now. It was 6% from April through June and rose to 7% in July. Either way, it’s interest on your interest — and it’s been accruing from the original due date, without regard to any extension of time to file.

There’s a late-payment penalty on top: 0.5% of what you still owe for every month or part of a month it stays unpaid, up to 25%. One nuance worth knowing: if you paid at least 90% of what you owed by April 15 and pay the rest when you file, the late-payment penalty generally doesn’t apply. The interest does — there’s no escape hatch on that.

Then October 15 adds the big one

The failure-to-file penalty is 5% of what you still owe for each month or part of a month the return is late, up to 25%. That’s roughly ten times the late-payment rate — and it only starts once you miss the filing date. When both penalties apply in the same month, the IRS caps the combined charge at 5% for that month.

So the golden rule of deadline season is simple: file even if you can’t pay. Filing on time potentially stops the 5%-a-month clock before it starts. Not filing is the single most expensive thing you can do in the next two weeks.

Your 14-day playbook

• File by October 15, no matter what. Missing documents? Don’t let the deadline pass silently — talk through your options before it does. A late return triggers the failure-to-file penalty; the extension can’t save you a second time.
• Pay whatever you can with the return. Every dollar paid potentially stops interest and the late-payment penalty on that dollar.
• Then set up a payment plan. The IRS offers installment agreements. For individuals who filed on time and arrange an approved plan, the late-payment rate drops to 0.25% a month. The plan comes after the return — never instead of it.

Owe nothing and expecting a refund? There’s no late-filing penalty — but unclaimed refunds don’t wait forever, so file anyway.

Alex Volkov, CPA is a New York-licensed CPA with over two decades in accounting, focused on resolving IRS tax problems — back taxes, liens, levies, garnishments, and audits — for individuals and businesses nationwide.