It’s Tax Day and if you have put off filing your tax return for the past three months, your excuses have run out.
Here is what you need to know about filing your income tax return.
When is the deadline?
Monday is the tax filing deadline for most people. If you live in Maine or Massachusetts, you have one more day to file because of a state holiday.
What happens if I don’t file on Monday?
If you don’t file your income tax return on Monday, and you owe the government money, you will face fines and penalties in addition to the taxes you owe.
Can I get an extension on filing my return?
You can file for an extension, but filing for an extension does not mean you do not have to pay any taxes you owe. It simply means you have more time to file the return.
If you owe taxes, you are required to pay the bill by April 18.
What kind of penalties do I face if I don’t file my return by Monday?
If you owe taxes and do not pay by Monday, penalties immediately take effect. The two penalties you will face are penalties for failure to file a return and failure to pay your tax bill. The penalties can be hefty.
According to the IRS:
· The Failure to File Penalty is 5% of the unpaid taxes for each month or part of a month that a tax return is late. The penalty won’t exceed 25% of your unpaid taxes.
· If you still haven’t paid after five months, the Failure to File Penalty will max out, but the Failure to Pay Penalty continues until the tax is paid, up to its maximum of 25% of the unpaid tax as of the due date.
· If your return was over 60 days late, the minimum Failure to File Penalty is $435 (for tax returns required to be filed in 2020, 2021 and 2022) or 100% of the tax required to be shown on the return, whichever is less.
How do I file my taxes?
Electronic filing is the way most people file their taxes. It is easier for the IRS to process the return and issue a refund or collect taxes owed.
If you file electronically and include direct deposit information, you should get your refund within 21 days.
If you file a paper return, it will likely take months to get your refund because the IRS has a backlog of millions of returns to process and fewer employees to process returns by hand.
Will I have to pay to file a return?
The IRS uses a service known as Free File if your adjusted gross income is $73,000 or lower.
If your income is above $73,000, then you will have to pay a tax preparation company to file electronically.
What if you can’t pay the amount of tax owed?
There are payment plans available to people who do not have the money to pay their tax bills by April 18.
However, under those plans, penalties will still be charged.
Should you skip filing if you cannot pay the tax you owe?
No, you should not skip filing. If you skip filing, you will have to pay a penalty for failing to file in addition to failing to pay the tax owed.