- The April 18th tax deadline is fast approaching. If you’re not ready, apply for an automatic extension through October 16th.
- Please note that an extension of time is not an extension of payment. So to avoid penalties, include payment.
- Also, if you’re self-employed, remember that your estimated first quarter payment deadline is April 18th.
There are only two weeks left until the April 18th tax deadline. If you have not filed your taxes yet, we recommend that you do so immediately or file an extension to avoid fines and interest.
one week Ends March 24less than half of the number of Americans who expect the IRS to file individual returns have done so. That’s well below the more than 168 million returns we projected for the season.
This means that many submissions will be late this year. Some are in a hurry to meet the midnight April 18th deadline, while others have to submit their extensions on October 16th.
If you’re in the first camp, the good news is that the IRS is processing returns sooner than in 2022 and processing refunds in bulk.So far, compared to the same time last year We processed 1.9% more returns and issued 2.6% more refunds.
However, if you need to apply for an extension, you should know:
Deadlines to know:The 2023 tax season officially begins: Here are the key deadlines to keep in mind:
What is a tax increase?
It is important to know that filing an extension will give you an additional six months to file your tax return. no An extension to pay what you owe. To avoid possible penalties, you must estimate and pay any unpaid taxes by the normal deadline.
Extended Income Tax Return Deadline
Extension requests must be submitted by the normal April 18 tax deadline. The new deadline will be October 16th for him as it will be done automatically as soon as you submit. If you owe tax and don’t apply for an extension, the IRS will charge you a hefty fine for failing to do so.
According to the IRS, if the refund is overdue or you don’t have to declare it, no penalty will be imposed. But experts say it could be a risky strategy. If you make a mistake in the calculation and borrow money, you may end up paying a large amount of penalty.
You may need more time.How long should you wait before filing your taxes? Surprise!sometimes better later
Important information:Are you ready to file your taxes? Here’s everything you need to know to file your taxes in 2023.
How to apply for extension of tax return
Applying for an extension is easy and free. We need basic information such as your name, address, social security number, estimated tax payments, and payment of debts, if any. Only those who owe less than $1,000 or paid at least 90% of the tax amount shown on their return for the tax year or 100% of the tax amount shown on their return for the previous year, whichever is less can avoid underpayment penalties. says the IRS.
Individual tax filers can use the IRS regardless of income free file Request an extension electronically. Alternatively, you can pay all or part of your estimated income tax electronically and indicate that your payment will be extended.You can make payment at direct pay using Electronic Federal Tax Payment System (EFTPS) or credit card or debit card.
If you wish to have it mailed paper version For Form 4868, make sure it is postmarked by April 18th.
Tax avoidance goals:Want to know how to avoid taxes?Strategies for the ultra-rich that you can use too
refund. So? :How much profit can you make by investing your tax returns each year
Does it cost money to apply for a tax extension?
Applying for an extension is free, but you must pay your tax estimate by April 18.
What are the effects of natural disasters? IRS May Extend Time to File
Residents of states affected by natural disasters have more time to file returns and pay the IRS.
For example, storm and tornado victims in Mississippi now have until July 31st to file and pay various federal personal and business tax returns.
Mississippi was hit by tornadoes and severe storms on March 24th and 25th.
Resident Other states could also be bailed outIncluding California and New Yorkers who have been hit by severe snowstorms and flooding this winter.
Last minute tax benefits:The tax deadline is one month away. Here are some contributions you can still make – and deducted.
Unemployment and Taxes:Fired last year?What you need to know about tax returns after retirement
What happens if the tax return is late?
According to the IRS, there are no penalties if you are receiving a refund. However, usually he may lose the refund if he does not file the return within three years from the April deadline.
If you owe money, there are two penalties:
- According to the IRS, failure to file “will cost you 5% of unpaid taxes for the month or part of the month in which your tax return is late. Penalties will not exceed 25% of unpaid taxes.” However, minimum penalties apply if the declaration is more than 60 days late. This is the lesser of $450 or 100% of the unpaid taxes. For example, if you owe $2,000, the first month’s penalty is $100, but after the first 60 days, the minimum penalty of $450 applies. The penalty remains $450 until the maximum penalty is reached in the fifth month. 25% of $2,000 in unpaid taxes, or $500.
- non-paymentThis is equal to 0.5% of unpaid taxes and interest, but not more than 25% of unpaid taxes. So if you have $1,000 in debt, your penalty will be $5 each month, up to a maximum of $250.
If both penalties apply in the same month, the non-submission penalty will be reduced by the amount of the non-payment penalties applied in that month. For example, instead of his 5% non-reporting penalty for the month, the IRS will apply a 4.5% non-reporting penalty and a 0.5% non-paying penalty.
In addition to these penalties, the IRS will charge interest on any unpaid balance.National Tax Agency Update interest rates quarterlybut now individuals are charged 7%.
De-inflation curveball:IRS: If you received an inflation-mitigated check in 2022, wait to file your taxes
car credit:Should you buy an EV? Great discounts, tax deductions and buying guides on when to buy.
What if I can’t pay?
Anyway, file your taxes or apply for an extension. As you can see from the example above, the penalty for non-compliance is much steeper than the penalty for non-payment. You can also save on penalties and interest by making a payment, even if it’s only a partial payment.
The IRS offers taxpayers several options.
- online payment plan one that can be applied immediately. short term payment plan Within 180 days if the total amount of taxes, penalties and interest is less than $100,000, or long term payment plan Payable monthly for 180 days or more and for amounts less than $50,000 including taxes, penalties, and interest.
- Compromise. if you qualify If you have a difficult reason, you can settle your debt for less than the full amount you owe.
- Reduced penalties For those who were law-abiding but were unable to pay due to unavoidable circumstances.
Taxable Retirement:Social Security benefits are increasing, but so are taxes. Here’s why:
Tax savings after retirement:Tax diversification helps save money. Now let’s think about retirement.
If you are self-employed, don’t forget to pay estimated tax
If you are self-employed, have not received a W-2 from your employer, and are expected to pay at least $1,000 in taxes when you file your tax return, the first quarter of 2023 estimate The tax amount is paid in April. 18 too.
Failure to do so may result in a penalty charge. In addition, even if a refund is required at the time of final tax return, a penalty may be incurred if the estimated tax payment is delayed. IRS warns.
You can use. IRS worksheet Determine how much you owe.
Answers to other questions about the 2022 tax season
Medora Lee is a money, markets and personal finance reporter for USA TODAY. You can contact her at mjlee@usatoday.com and subscribe to her free Daily Her Money newsletter where you can get personal her finance tips and news about her business every Monday through Friday morning.
Contributed by Brett Molina. Follow Brett Molina on Twitter. @brettmolina23 Or send an email to Bmolina@usatoday.com.
