Over the past two years, the IRS has extended the deadline for filing taxes due to the COVID-19[feminine] pandemic: giving Americans extra breathing space to end their returns. This year, Tax Day returns to its usual scheduled deadline, with returns until April 18th.
The good news? For those who need more time, requesting an extension is quick and easy. And it will give you until October 17, 2022 to submit your tax return to the IRS.
According to the latest IRS statistics, Americans are already lagging behind in the current fiscal season. Some 91 million people filed their tax returns on April 1, down from 93 million taxpayers at the same time last year, when taxpayers had an additional month to file their taxes with the taxpayer. IRS, according to the agency.
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In a normal year, Americans file about 160 million tax returns, which means that about 70 million have yet to be filed before the April 18 deadline.
“People tend to wait until the last minute,” said Eric Bronnenkant, Betterment’s chief tax officer. “You can get an extension for about six months, but one of the most important things to know about submitting an extension is that it’s not an extension to pay.”
In other words, if you owe the IRS this year, you’ll still have to pay Uncle Sam by the end of April 18, even if you get an extension until October. Here’s what you need to know about getting an IRS extension.
What is the deadline for submission this year?
Normally, the deadline for filing taxes is April 15, but this year taxpayers have until April 18 because the 15th falls on Emancipation Day, which is observed as a holiday in Washington, DC. As a result, the IRS offices will be closed on April 15. .
Residents of Maine and Massachusetts have an additional day to file them, until April 19, due to the recognition of these states on Patriots Day on April 18.
Taxpayers who have an extension to file their taxes will have until October 17 to file their taxes. The extension usually gives people until October 15 to submit their forms, but since that date is Saturday, taxpayers have until the next business day, October 17, to submit them.
How do I get a tax extension?
First, you must apply for an extension by April 18 or you could face a penalty for “not filing,” the IRS said. (See more about this penalty below.)
To apply for an extension, you must complete Form 4868. This is a one-page form that asks for basic information such as your name, address, and Social Security number. He also asks you to calculate how much you owe in taxes.
This form can also be used by the IRS Free File Service and can be used regardless of revenue. Normally, only people with gross income adjusted below $ 73,000 can use the free file service, but anyone can use it to request an extension, the IRS said.
What? Do I still have to pay the IRS?
True, getting an extension to file your tax return does not give you an extension to pay what you owe the government.
The IRS expects people to make an effort to pay what they owe, Bronnenkant of Betterment said. This can be difficult for people who have not yet completed their tax returns, but it is best to make a good faith estimate.
“If your previous year is a good barometer for your current year, start with that as a way to make some sort of reasonable estimate,” Bronnenkant said. “Don’t let the perfect be the enemy of the good enough.”
For example, if you estimate that you owe $ 10,000 but you actually end up paying $ 11,000, you will be charged a fine for underpayment. But it will be less painful to face a $ 1,000 underpayment penalty instead of the full $ 11,000 it owes, Bronnenkant said.
What if the IRS owes me a refund?
If the IRS owes you money, you’ll have to wait until the IRS processes your return tax return. Therefore, if you delay filing until October 17, you will not receive the refund until about three weeks after that date based on the IRS assessment that most taxpayers will receive the refund within 21 days. at the presentation.
The average return this year is more than $ 3,200, according to the latest IRS data.
If you think the IRS owes you money, you don’t have to send a check to the IRS before April 18, of course. However, you should be sure that you are right in your assessment, otherwise you will face penalties for not paying your debt to the IRS.
What are the penalties for not filing?
If you do not complete your tax return by April 18, it is best to file an extension because the penalty for not filing it is harsh. It is based on the delay of the tax return, as well as the size of the unpaid taxes from the due date.
The penalty rate is 5% of unpaid taxes for each month of late filing, with a 25% limit. Take a taxpayer who owes $ 10,000 but doesn’t ask for an extension – if you’re two months late, you’d be $ 500 a month for a total of $ 1,000 in penalties.
What are the penalties if I don’t pay enough?
The penalty for non-payment is less punitive than failure to file. The IRS collects 0.5% of unpaid taxes for each month, with a limit of 25% of unpaid taxes.
Take someone who pays an estimated $ 10,000 tax before April 18, but it turns out they actually owe $ 11,000. They will face a charge of 0.5% of the additional $ 1,000 they owe the IRS. If they file the return in June, two months after the tax deadline, they would owe $ 10.
Do I need to submit an extension to my status?
It depends. Once you’ve applied to the federal government for an extension, check to see if you need to do it for your state. According to the IRS, “state filing and payment deadlines vary and are not always the same as federal filing and payment deadlines.”
Some states will automatically give you an extension of your state taxes if you receive a federal extension. In other states, you’ll need to request a separate extension. The Federation of Tax Administrators provides a summary of how to check tax information for the state where you live.
If you live in one of the nine states with no personal income tax, you’re probably clear. However, two of these states, New Hampshire and Tennessee, still tax investment income, so if you have dividend income, stock sales, or other investments, you may need to file a return. state taxes in these states.
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