Time is running out for millions of Americans. The final deadline to file your 2022 taxes is approaching.
Every year, millions of people apply for an automatic extension to pay their taxes beyond the original April deadline. By mid-May, more than 142 million taxpayers had filed their returns. according to To the I.R.S.But the agency Expected to be approximately 168 million This means more than 25 million taxpayers are still waiting past the April 18 filing deadline.
Now you don’t have to procrastinate anymore.of Final tax return filing deadline is Monday, October 16th. If you do not meet this requirement, you can expect to be subject to significant penalties. The IRS said penalties for late filing “can be up to 10 times the penalty for failure to pay.”
How much will the IRS fine me if I miss the deadline?
of Non-declaration penalty Depending on the late filing and the amount owed, the clock started on the original deadline of April 18th, rather than the extended deadline of October 16th. Interest is also charged on the penalty, so the balance will continue to grow until it is paid in full.
of interest rate The personal tax owed is 7% and is compounded daily. Monthly late filing penalties are typically 5% and late payment penalties are typically 0.5%. Both can be up to 25%, according to the IRS.
Even if you have debts that you cannot pay, please declare them anyway. “The worst thing you can do is not apply,” he said. Phil Drudy, CBIZ Managing Director and Head of Tax MHM New York Department of Taxation.
What happens if I can’t pay my taxes?
“If you owe money, file your return and then start the planning process. There are several legitimate ways to pay off your debt,” Dordi said.
Most people can set up IRS.gov payment plans Pay off your balance over time. The IRS says some people may choose to take out a loan or pay with a credit card to resolve their tax debt.
If you have to pay both federal and state taxes, try to pay off your state tax debt first.
“Most states don’t have strong plans or mechanisms to pay over time, and some states can be very aggressive,” Drudy said. “Some states have private collection agencies and if you don’t pay your taxes, you have to deal with it.”
He added that state penalties for late filings and payments are also generally higher than IRS penalties.
What will happen to my FTX holdings?
After the government filed criminal charges against FTX founder Sam Bankman Fried and some of its executives in the company’s bankruptcy last spring, more than 1 million taxpayers were asked whether they would be able to apply to the IRS’s stolen loss provisions. I was at a loss because I didn’t know what to do. This rule allows you to claim losses as an itemized deduction if the theft is considered illegal in the state where it occurred and was done with criminal intent.
Some may have filed for tax extensions in hopes of getting clarity from the IRS on how to deal with potential crypto losses due to the scandal.
But “nothing has changed at FTX,” Drudi said. “We are still at a loss.” Bankman Freed’s trial has just begun, so a resolution may not be forthcoming, he said.
In Drudy’s view, taxpayers have three options:
- If you want to profit from crypto losses, work with your tax and financial advisor to determine if you can pinpoint when in 2022 your holdings could be declared worthless. please.
- If you wish to “abandon” your holdings, you can send your cryptocurrencies to: null address and incur losses. However, it is too late to do this for your 2022 taxes. This will count against your profits for the 2023 tax year.
- Do nothing and continue waiting for instructions from the IRS. “You’re not going to give it up unless you know it’s actually worthless,” Drudi said.
What happens if my payment is late:Are you late in paying your taxes? If you do not pay by the deadline:
Are there any exceptions to the deadline?
Persons whose addresses are on file with the IRS who are subject to a Federal Emergency Management Agency disaster declaration and persons returning from a combat zone. It may take more time to fill oute.
They include:
◾ Taxpayers affected by the flooding in Illinois and Alaska have until October 31st to file their returns.
◾ Vermont flood victims must apply by November 15th.
◾ Taxpayers affected by recent natural disasters, such as the recent Maui fires and Hurricane Idalia in parts of Florida, South Carolina, and Georgia. These people have until February 24th to file various personal and business tax returns. Taxpayers who may be affected by the recent storms should visit: disaster relief Please visit the IRS.gov page for the latest information.
◾ Military and other military personnel combat zone Generally, you must file a return and pay taxes within 180 days of leaving a combat zone.
conclusion
If you owe taxes, declare them no matter what.
Even if you’re not sure about every item, “you can include a statement that you’re applying to the best of your knowledge and will adjust your application as necessary,” Drudi said. And if you are audited, you can say, “I acted in good faith,” and your fines are likely to be reduced.
Medora Lee is USA TODAY’s money, markets and personal finance reporter. Please contact us at mjlee@usatoday.com. Subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
