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Thursday June 20, 2024

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Late Filers Can Save Interest and Penalties

On April 19, 2023, the Internal Revenue Service (IRS) published a letter reminding taxpayers who missed the April 18 tax-filing deadline to file quickly. A prompt filing may limit the penalties and interests for those who owe a tax payment. The IRS also reminded over one million taxpayers that they are missing a potential tax refund by not filing. These taxpayers should be using the Free File program or another method to file and claim a refund.

There are several categories of taxpayers who may automatically qualify for extra time to file and pay tax. Military active duty members who are serving in a combat zone qualify for an extension of 180 days. This may also apply to some support personnel in combat zones. Taxpayers living overseas generally qualify for a two-month filing and payment delay. Finally, a number of U.S. regions have been declared a disaster zone by the Federal Emergency Management Agency (FEMA). These taxpayers also may have an extended filing and payment due date.

Filing for taxpayers who potentially may receive a refund is particularly important. Many individuals with modest income qualify for the Earned Income Tax Credit or the Child Tax Credit. If taxpayers have not filed and qualify for a refund, there is no penalty for missing the April 18 deadline. For income qualified taxpayers, the IRS Free File program is available until October 16, 2023. If filing and the taxpayer qualifies for a refund, the IRS recommends you use the "Where's My Refund?" tool on IRS.gov or the smartphone app IRS2Go to track the status of the refund. The refund information updates each night.

If taxes are owed, taxpayers should file promptly and pay the taxes due. The IRS also reminds taxpayers that extending your filing date until October 16 does not mean your tax payment date has also been extended. The taxes should be paid in full as soon as possible.

If a taxpayer is unable to pay the full amount and have paid taxes timely for the past three years, he or she may qualify for abatement of the tax penalty. There is explanation on how to qualify for this penalty relief on IRS.gov.

The best way to pay overdue taxes is through an IRS Online Account or IRS Direct Pay. The Direct Pay or the Electronic Federal Tax Payment System (EFTPS) enables the taxpayer to receive email confirmation for payment. If taxpayers need assistance, finding an available tax professionals in their area may be a good option. There is a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications on IRS.gov.

Published April 21, 2023


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