If you fail to file your taxes on time, you may be subject to a late filing penalty. The penalty is usually 5% of the unpaid taxes for each month or part of a month that a tax return is late, up to a maximum of 25%. In addition, there may be a late payment penalty of 0.5% of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can build up to a maximum of 25%.