Tax season is officially upon us. By the end of January, you should have your W-2s, 1099s and other forms you need to file your 2023 tax year return. (Read more: How do I File Delinquent Tax Returns if I Don’t Have Any Records?)
Here are the answers to some of the most common questions about tax filing in 2024:
2024 Tax Deadline for 2023 Tax Returns
Monday, April 15, 2024 is the 2024 tax filing deadline for 2023 tax year returns.
2024 Tax Deadline to Pay Taxes Due for 2023 Tax Returns
Monday, April 15, 2024 is also the 2024 tax payment deadline for 2023 taxes due. If you owe taxes for 2023 and do not pay by April 15th, the IRS will add penalties and interest. Even if you file for an extension, you must pay taxes due by the 15th to avoid an even higher tax liability.
2024 Tax Deadline to File for an Extension for 2023 Tax Returns
Monday, April 15, 2024 is the 2024 tax deadline to file an extension for 2023 tax year returns. If the IRS approves your extension, you have an additional 6 months, until Tuesday, October 15, 2024, to file your 2023 tax return.
How To File for a Tax Extension in 2024
You can file for a tax extension in 2024 by submitting Form 4868 to the IRS on or before the April 15, 2024 tax deadline. You can e-file Form 4868 electronically or send it by mail. If you choose to file by mail, make sure it is postmarked no later than April 15, 2024.
Tax Penalty for Not Filing 2023 Tax Return by the 2024 Tax Deadline
The penalty for not filing a tax return by the 2024 tax deadline is higher than the penalty for not paying your tax balance by the 2024 tax payment deadline. Therefore, you should always file by the deadline even if you expect to have a tax liability you are not prepared to pay.
If you fail to file your 2023 tax return by the April 15 tax deadline, the penalty is 5% per month of the total taxes owed — or 10 times the penalty for filing your 2023 tax year return on time but not paying your full balance — also not to exceed 25% of the total balance. (Read more: “How Does the IRS Calculate Tax Debt Penalties and Interest?”)
Tax Penalty for Not Paying 2023 Taxes by the 2024 Tax Payment Deadline
If you file your 2023 tax return by Monday, April 15, 2024 but do not pay all the taxes you owe by the 2024 tax payment deadline, you will begin accruing a penalty of 0.5% per month on the unpaid portion of your taxes, not to exceed 25% of the total balance.
It is worth noting that if you do not owe taxes or are owed a refund from the IRS, there is generally not a penalty for filing your return late. That said, you will not receive any tax refund owed to you until you file.
Owe Back Taxes in 2024 and Can’t Pay Full Amount You Owe for 2023 Tax Return
If you owe back taxes from previous years and cannot pay the full amount you owe for your 2023 tax return, you should still file your taxes and pay what you can. Remember that the IRS charges a penalty for every month you have unpaid taxes, and since that penalty is based on the total amount you owe, you want that amount to be as small as possible.
There is an even larger penalty for failing to file your return by the deadline, which is why you should always file even if you owe more than you can pay.
As for the portion of your 2023 tax return that you are unable to pay, you have several tax relief options. These relief options include submitting an Offer in Compromise to settle for less than what you owe or setting up a monthly IRS payment plan to pay your tax balance in smaller installments.
2024 Tax Refund If You Settle Back Taxes and File 2023 Tax Return by the 2024 Tax Deadline
If you settle your back taxes and file your 2023 tax return by the 2024 tax deadline, then assuming you overpaid during the 2023 tax year, in most cases you will receive a tax refund in 2024.
2024 Tax Refund If Your Offer in Compromise Was Accepted in 2023 and You File by the 2024 Tax Deadline
If the IRS accepted your OIC on or after November 1, 2021, you are eligible to receive a tax refund thanks to a rule change by the IRS in which they no longer hold the first-year tax refunds of individuals with OICs approved after that date. If your OIC was approved before November 1st, you might not be eligible for a tax refund until you file in 2024.
How Can Wiztax Help?
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