Tax Day: Tips for 50M last-minute filers
It’s tax day, and millions of Americans have yet to file.
According to the IRS, as of Friday, about 50 million taxpayers had not submitted their documents.
Overall, the agency expects 153 million individual returns will be filed this year. By April 5, it had received more than 103 million returns. Nearly 78 million of those people received tax refunds, which cumulatively totaled $220.8 billion. Meanwhile, the average refund is roughly on par with last year, at about $2,833.
With the Monday deadline upon us, the IRS is gearing up for a surge of last-minute returns. It said it expects to receive 14.8 million returns this week, and another 18.3 million next week.
Here are some tips from the IRS for people who are running up against the deadline.
Turn to the website:
The IRS said its website offers help at all times, including on everything from filing a return to requesting an extension or making a payment.
Tax preparation tips:
IRS Free File is available to certain qualifying taxpayers, with incomes up to $66,000. The Free File service helps these taxpayers connect with available software options. There are also free fillable forms available to all taxpayers doing their own taxes.
There are a number of E-File software purchase options available on the IRS site, provided by third-party companies.
The IRS offers free tax help for certain qualified individuals through the Volunteer Income Tax Assistance and the Tax Counseling for the Elderly programs.
Filing for an extension:
By filing for an extension, a taxpayer will have an additional six months to prepare and file his or her paperwork – until Oct. 15.
There are multiple ways taxpayers can request an extension, including using Free File or by using Form 4868. If you are mailing your form, it should be postmarked by the tax deadline. For businesses, there are different forms that may apply.
Payers can also get an automatic extension when they pay all or part of their taxes electronically by April 15 when using IRS Direct Pay, the Electronic Federal Tax Payment System or by credit or debit card and selecting Form 4868 as the payment type.
Don’t forget filing for an extension does not mean you don’t have to pay. The IRS still expects people who file for an extension to pay an estimate of taxes owed by the deadline – or face penalties and interest.
Making a payment:
Options to make your tax payment include electronic payment options, IRS Direct pay (which draws directly from a checking or savings account), or through tax software – among others. The IRS said electronic payment options are typically the quickest and easiest way to make a payment.
A reminder on penalties:
If you don’t file your return, the penalty is 5 percent of the unpaid taxes for each month that a return is late. The penalty begins accruing the day after returns are due – up to a maximum of 25 percent of your unpaid taxes.
If you fail to pay your taxes by April 15, the penalty is 0.5 percent of the taxes not paid.
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The penalty is weighed each month after the due date until the bill is paid or the levy reaches 25 percent of unpaid taxes.
The penalty for failing to file is reduced by the penalty for failing to pay during any given month where both apply– meaning the maximum penalty you’ll pay for both in any given month is 5 percent.