Warning about little-known Tax Day mistake which could cost you hundreds of dollars - here's how YOU can avoid it

Experts are warning about a little-known Tax Day mistake which could cost Americans hundreds of dollars. 

The April 15 federal income tax filing deadline is just around the corner, with millions of people still yet to file their returns.

Taxpayers have until midnight on April 15 to submit their return to the Internal Revenue Service (IRS).

But expert David Straughan warns that Americans may overlook time zones when it comes to meeting the deadline - which means the cut-off is actually up to three hours earlier in some parts of the country. 

Tax penalties will kick in even if your return is a few minutes late, and can add up to hundreds of dollars.

Experts are warning about a little-known Tax Day mistake which could cost Americans hundreds of dollars

'One thing people may not think about when it comes to tax deadlines is time zones,' said Straughan, a researcher and writer at MarketWatch Guides.   

'The IRS is located in Washington, D.C., which operates off of Eastern Standard Time (EST). That means the deadlines it sets are based on EST. 

'So, when the IRS says that the deadline is midnight, April 15, that deadline is actually 9pm on the west coast, 10pm in the mountain time zone and 11pm in the central time zone.'

He warned that it does not matter if you miss the filing deadline by a few days or a few minutes - late is late in the eyes of the IRS. 

'Tax penalties start accruing as soon as you are late in your filing if you owe money,' he said. 

The IRS imposes a penalty for filing your return late and another for paying your taxes late. 

'One thing people may not think about when it comes to tax deadlines is time zones,' said David Straughan, a researcher and writer at MarketWatch Guides

The failure-to-file penalty is typically 5 percent of the tax owed for each month or part of a month the return is late, with a maximum penalty of 25 percent. 

For example, if you owe $1,000 in taxes, you will pay $50 for every month or partial month your return is late. 

If your return is more than 60 days late, the minimum penalty for not filing taxes is $485 or the entire amount of tax owed - whichever is smaller. 

The late-filing penalty maxes out after five months of your return being late, but other fees and interest may continue to accrue.  

There is usually no failure-to-file penalty if you do not owe anything and your return ends in a refund. But if you do have a filing obligation, you should still plan to file as soon as possible to get any funds back.

The late-payment penalty, meanwhile, is a separate fee which is issued if you fail to pay your tax bill. 

This fee is 0.5 percent of your unpaid bill for each month that a balance is due, with a maximum payment of 25 percent of the outstanding funds. 

The unpaid money will also begin building interest, which is 8 percent per year, and is compounded daily - meaning it will add up quickly.   

If you owe taxes and do not file or pay on time, both the failure-to-file penalty and the late-payment penalty will be issued.

The IRS imposes a penalty for filing your return late and another for paying your taxes late (Pictured: IRS Commissioner Danny Werfel)

If you are concerned that you may not be able to file your return on time you could consider filing for an extension.  

Residents of some states have already been granted specific extensions because of natural disasters, while others have slightly later filing deadlines due to holidays. 

For residents of other states, if you request and receive an extension, the deadline to file will be pushed back to October 15.

However doing so does not mean that you have an extension to pay your taxes, so you will still face a late penalty if you owe money.