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The time for procrastinating is over. It’s time to file your taxes.
April 18 marks the deadline for taxpayers to file their annual returns. Tax Day is typically April 15, but because that date falls on a Saturday, and due to a Washington, D.C. holiday on Monday, the filing deadline was pushed to April 18.
As of April 7, the Internal Revenue Service has processed more than 101 million returns. The average refund to taxpayers is $2,878, down from $3,175 at the same time a year earlier.
The lower refunds are partially attributed to the elimination of key credits available to taxpayers last tax season.
Here’s everything you need to know if you still haven’t filed your taxes:
When are taxes due?
Taxes are due by April 18 since April 15 falls on a Saturday and Emancipation Day, a holiday observed in Washington, D.C., is April 17.
– Elisabeth Buchwald
What happens if you don’t file taxes on time?
Taxpayers who don’t file by the deadline face hefty penalties. According to the IRS, the “Failure to File” penalty is 5% of unpaid taxes for each month you don’t pay, but it won’t exceed 25%. And that doesn’t count any additional state penalties.
If you fail to pay taxes on time, the penalty is 0.05% of unpaid taxes for each month you don’t pay, with a 25% cap.
What is the tax year deadline for IRA contributions?
Along with tax filing and first quarter estimated tax payments, Tuesday’s also the last call to contribute to your IRA for a 2022 tax deduction unless you live in an area that was granted a filing extension by the IRS.
Total combined contributions for both traditional and Roth IRAs are capped at the smaller of $6,000, or $7,000 if you’re age 50 or older by the end of the year; or your taxable compensation for the year, the IRS said.
Filers may also add funds to their health savings account (HSA), if they are eligible for one, to count toward 2022. In both instances, just make sure you mark your contributions for the 2022 tax year.
–Medora Lee
What triggers an IRS audit?
When you’re audited by the IRS, it means your return was selected from a batch of returns for a closer inspection. Sometimes returns are selected at random for a closer review.
A lot of audit notices the IRS sends are automatically triggered if, for instance, your W-2 income tax form indicates you earned more than what you reported on your return, said Erin Collins, National Taxpayer Advocate at the Taxpayer Advocate Service division of the IRS.
That’s why Collins recommends taxpayers ensure the income they report on their returns is consistent with the income that’s stated in official income tax documents like a 1099 or W-2.
In terms of income levels, the IRS in recent years has audited taxpayers with incomes below $25,000 and above $500,000 at higher-than-average rates, according to government data.
– Elisabeth Buchwald
Triple check your work to avoid common mistakes that’ll delay processing
When you’re in a rush to finish your taxes, it’s easy to make a mistake.
Even what seem like small mistakes such as Social Security Numbers not matching with what the IRS has on file; missing or incorrect the Identity Protection PIN for the taxpayer or spouse; employee identification numbers on W-2s not matching what’s in the database; selecting the wrong filing status; including the wrong bank information for direct deposit; miscalculating your math will delay processing your return, said Mark Steber, Jackson Hewitt chief tax officer.
“Also, make sure you sign your return before sending,” said financial advisor and professional tax preparer Rob Burnette of Outlook Financial Center. An unsigned tax return isn’t valid, the IRS says.
–Medora Lee
What is the penalty for mistakes?
An Accuracy-Related Penalty applies if you underpay the tax required to be shown on your return.
There are 2 common Accuracy-Related Penalties to individuals:
- Negligence or Disregard of the Rules or Regulations: when you don’t make a reasonable attempt to follow the tax laws when you prepare your tax return or carelessly, recklessly or intentionally ignored the tax rules or regulations. The penalty is 20% of the portion of the underpayment of tax that happened because of negligence or disregard.
- Substantial Understatement of Income Tax: if you understate your tax liability by 10% of the tax required to be shown on your tax return or $5,000, whichever is greater. The penalty is 20% of the portion of the underpayment of tax that was understated on the return.
–Medora Lee
Is the IRS taxing the California middle class tax refund (MCTR)?
Twenty-one states, including California, issued special payments to their citizens last year. The IRS said most of these payments don’t need to be reported on 2022 tax returns.
People in the following states do not need to report these state payments: California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island. Alaska also is included in this group, but the IRS notes that state’s annual payment of Alaska’s Permanent Fund Dividend and any payments from states provided as compensation to workers will be included in income.
People in Georgia, Massachusetts, South Carolina and Virginia also will not include state payments in income for federal tax purposes if they meet certain requirements.
–Medora Lee
Is California Franchise Tax Board (FTB) middle-class tax refund taxable?
No, the FTB said those who received this payment don’t need to claim the money as income on California income tax returns.
The IRS also said the federal government won’t tax that money.
–Medora Lee
How to set up a federal tax payment plan with the IRS?
If you discover you don’t have enough cash to pay your tax bill, the IRS offers various payment plans. You can apply for a payment plan online to pay off your balance over time.
Once you complete your online application you will receive immediate notification of whether your payment plan has been approved, the IRS said.
You’ll need to create an account with ID.me, photo identification and balance due.
When deciding which payment plan is right for you, “it is important to consider how quickly you can pay off your balance,” said Mark Jaeger, VP of tax operations at TaxAct. “Installment agreements vary based on the amount owed and the time it’ll take for you to pay it off.” There may also be a fee to set up a plan and you’ll still be on the hook for late-payment penalties and interest.
Payment plans are “a better option than even choosing to pay your bill with a credit card considering the typically high monthly interest rates that come with credit cards,” Jaeger said.
–Medora Lee
McDonald’s Tax Day deal
In select locations around Brevard County, Florida, you can purchase a Big Mac or 10-piece Chicken McNuggets and get a second for a penny.
IRS phone number to talk to a person
After horrific service last year, the odds went up in 2023 that you might actually get someone to pick up the phone at the IRS.
The IRS notes that its helplines are open Monday through Friday. Individuals can call 800-829-1040 from 7 a.m. to 7 p.m. local time.
The IRS recommends looking for answers first at IRS.gov but you can call if you’re stumped or need other help.
On Monday, the IRS said it has reached an 87% level of service this tax season, beating Treasury Secretary Janet Yellen’s goal of 85%. Last year, the IRS acknowledged, the agency was able to perform at that level of service of less than 15%.
IRS customer service reps answered more than 2 million more calls than last year and cut the wait by 85% in 2023. The average wait time fell to 4 minutes from 27 minutes during the 2022 filing season.
The IRS reopened Taxpayer Assistance Centers in 2023 to offer in-person help in many areas, including Casper, Wyoming; La Crosse, Wisconsin; Binghamton, New York; and Jackson, Tennessee. The IRS has served 428,000 taxpayers in person so far this year – or some 100,000 additional people compared with the same time last year, according to Deputy Secretary of the Treasury Wally Adeyemo.
The IRS said it cleared the backlog of unprocessed 2022 individual tax returns with no errors, which should help with processing returns this year.
Here’s the list of additional IRS numbers to call if you need help.
– Susan Tompor
Can you get direct deposit if you need to amend a return?
Yes, the IRS has launched a direct deposit option for 1040-X amended returns. In the past, you were only able to get a paper check – which delayed getting refund cash.
– Susan Tompor
Quarterly tax payments are due when?
You may still be finishing up your 2022 tax year return, but the IRS reminds everyone that Tax Day, April 18, is also the deadline for first-quarter estimated tax payments for tax year 2023.
Those who are self-employed or in the gig economy need to make estimated tax payments. Investors, retirees and others often need to make these payments, too, because a substantial portion of their income is not subject to withholding.
If you don’t pay estimated taxes on time, you may be subject to penalties.
—Medora Lee
How do I pay quarterly estimated taxes?
You should use Form 1040-ES, Estimated Tax for Individuals, which includes instructions to help taxpayers figure their estimated taxes, or visit IRS.gov/payments to pay electronically.
The IRS says the best way to make a payment is through IRS online account. There taxpayers can see their payment history, any pending payments and other useful tax information. Taxpayers can make an estimated tax payment by using IRS Direct Pay; debit card, credit card or digital wallet; or the Treasury Department’s Electronic Federal Tax Payment System.
–Medora Lee
Will post offices stay open later on Tax Day?
Previous years, the U.S. Postal Service would keep post offices open longer on Tax Day for taxpayers who want to drop off their returns before the deadline.
This year, if you’re submitting a paper return, don’t expect post offices to maintain later hours.
“There are no plans to extend hours at any Post Offices across the country, especially since the IRS has given taxpayers until April 18, this year,” said USPS in a statement.
The IRS considers returns on time if they are postmarked on or before April 18. If your return is dropped off in a blue collection box or post office after the collection time, it will get postmarked with the next date.
For extra security, taxpayers can also get a certificate of mailing in case their return is lost or delayed to verify they mailed their return on time.
Visit the USPS website for details on operating hours for your local post office.
California taxes due 2023
If you live in parts of California affected by recent severe winter storms, flooding and other natural disasters, you have until October 16 to file your federal individual and business taxes.
For more details and other state deadlines, check here.
Separately, California’s Francise Tax Board (FTB) also extended the filing and payment deadlines for individuals and businesses in California until October 16 to align with the IRS move.
Should I file jointly or separately?
It’s the age-old quandary couples face each year because of the benefits and drawbacks that come with each option. A simple coin toss to decide which route to take could end up being more costly or cause you to miss out on hefty tax credits and deductions, leading to a smaller tax refund.
For instance, the standard deduction for married couples filing jointly is $25,900 this year versus $12,950 for separate filers. For newlyweds who aren’t yet homeowners this matters a lot since it likely makes more sense for them not to file an itemized return and take the standard deduction, says Tim Speiss, a certified public accountant and partner of EisnerAmper in New York.
Taxpayers who file jointly are eligible for more tax deductions and credits as married couples. For example, the Earned Income Tax Credit is generally only available to married couples who file jointly. The EITC enables low-income households to deduct as much as $6,935 off their taxes if they have three or more children.
– Elisabeth Buchwald
What time are taxes due?
We know Tuesday is the deadline, but what time exactly must you have returns submitted to the IRS? Taxes are due by midnight on April 18.
– Susan Tompor
When should you amend a return?
Sometimes, you file a return and then discover that you’ve made a mistake. Maybe you didn’t spot some paperwork, like a 1099 for a mutual fund held outside of a 401(k) plan. Or maybe it’s a ridiculous math error.
The IRS has a tool online to help you decide if you need to amend a return. Taxpayers can use the Should I File an Amended Return? tool at IRS.gov to help decide if they should correct an error or make other changes.
– Susan Tompor
Where can I file my taxes for free?
There are several services that offer free tax return prep, including IRS Free File, to file your federal return for free. Taxpayers must meet a certain income threshold to be eligible to use these services. For example, IRS Free File has an income cap of $73,000.
Why do I owe taxes this year?
One possible reason: The generous Advance Child Tax Credit and the recovery rebate credit on 2022 returns were eliminated for tax season.
Other factors, according to H&R Block, include whether you claimed unemployment during 2022, or if you took on any extra side jobs last year. Big life changes can also play a role in whether you get a refund – or you have to pay the IRS.
– Susan Tompor and Brett Molina
Tax Day deals 2023
Whether you’re getting a tax return or owe money, you can still take advantage of deals and freebies some restaurants and retailers are offering to mark the Tuesday tax return deadline. Promotions range from free shaved ice to discounted pizza and donuts to BOGO deals, so you can celebrate being done with your taxes.
– Amanda Pérez Pintado
Does it cost to file an extension on taxes?
It’s free to file for a tax extension. However, it only extends the deadline to file your return. If you owe the IRS money, you still have to pay by April 18.
How do I file a tax extension?
You can request an extension from the IRS, which gives you until October 16 to file your return. Look for Form 4868, available on most sites where you can file returns electronically. Residents of some states including Arkansas, Alabama and New York may be eligible for an extension if they lived near a disaster area.
Is the IRS website down?
As of Tuesday morning, the IRS website appears to be working as many taxpayers file their returns before the tax deadline.
More of your 2022 tax season questions answered
Follow Brett Molina on Twitter: @brettmolina23.
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