When Do Taxes Need To Be Filed 2022

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Tax Filing Deadline For Extensions Oct 17 2022

2022 TAXES: Understanding The Tax Forms You Need To File

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Every year, millions of American taxpayers mark April 15 as the deadline for filing their income tax returns.

While the vast majority of taxpayers meet this deadline, it is actually possible to request an extension to file your tax return. For those taxpayers, the final deadline to file their taxes is Oct. 17, 2022 . Here, we review the process of requesting an extension and what happens if you miss the final deadline.

What Else Should I Know About Filing Taxes

The number one thing Raven wants her clients to know is that tax advisors want to be involved throughout the year. While it may be too late to take this advice for filing your 2021 taxes, theres a lot of time left in 2022 to get acquainted.

We learn so much about our clients during filing season that we wished we had known throughout the year, and now theres so little time in those short 10 weeks to spend with each of our clients, she says.

That may mean doing a real deep dive into your tax return or connecting your tax accountant with your financial advisor so they can strategize for your future.

Taxes are one of those necessary things in life that needs to be done a reconciliation of the year. The magic happens throughout the year when taxpayers and advisors build trust with each other. Thats how a lasting partnership is developed.

Irs Provides Tax Inflation Adjustments For Tax Year 2022

  • IRS Statements and Announcements
  • IR-2021-219, November 10, 2021

    WASHINGTON The Internal Revenue Service today announced the tax year 2022 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2021-45PDF provides details about these annual adjustments.

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    What Are The Consequences Of Filing Late

    What happens if you must file your tax return late or if you donât file taxes at all? You could end up with an additional bill from the IRS. The one thing you must not do is ignore your tax situation. Not filing your return on time generally means any taxes due were not paid, and that can lead to serious penalties.

    The IRS will levy both a late filing penalty and a late payment penalty. How much you will have to pay depends on how late your filing and payment are and how much tax you owe.

    Without filing for an extension, missing the tax deadline incurs a penalty. Forms 1120 and 1040 have a penalty of 5% of the unpaid tax for each month the return is late. Forms 1120-S and 1065 have a penalty of $210 per shareholder or partner per month late up to 12 months. That amount can add up very quickly. Failure to pay the amount of tax owed on time results in a penalty of 0.5% of the amount due for each month it is unpaid.

    There is some good news for filers of Form 1120 or 1040. These penalties max out at 25% of the total tax owed. In a worst-case scenario, you max out at the 5% penalty for missing the tax deadline after five months. That âfailure to payâ penalty keeps going for quite some time if not resolved, with a total of 45 months, or close to four years.

    What if your business is a new corporation and you didnât have any taxable income? You must still file a tax return. New partnerships do not need to file a separate return.

    The Payment Deadline Is April 30 2022

    IRS W

    If you have a balance owing, your payment is due on April 30, 2022.

    If you or your spouse or common law-partner are self-employed, your payment is still due on April 30, 2022.

    Since April 30, 2022, falls on a Saturday, in both of the above situations, your payment will be considered paid on time if we receive it, or it is processed at a Canadian financial institution, on or before May 2, 2022.

    If you filed your 2020 return and qualified for interest relief, you have until April 30, 2022, to pay any outstanding income tax debt for the 2020 tax year to avoid future interest charges. This applies to the tax owing for the 2020 tax year only, and not for any previous tax year.

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    Filing Requirements For Dependents

    The IRS has different tax filing requirements for people claimed as dependents on another persons return. For dependents, filing status and age are factors, but so is the type of income received, whether earned or unearned.

    • Earned income includes salaries, wages, tips, professional fees, and taxable scholarships and fellowship grants.
    • Unearned income includes taxable interest, ordinary dividends, capital gain distributions, unemployment compensation, taxable social security benefits, pensions, annuities, and distributions from a trust.

    Here are the minimum income limits from the Draft 2021 Form 1040 Instructions:

    Filing Status
    • Your earned income plus $3,050
    Gross income of at least $5 and your spouse files a return and itemizes deductions

    Dependent children can avoid filing a tax return if they have only interest and dividend income and a parent elects to report the childs income on their own return. To make this election, you have to meet all of the following requirements:

    If you meet all the requirements outlined above, youll report the childs income on Form 8814 and file it with your Form 1040.

    How Far Back Can The Irs Go For Unfiled Taxes

    The IRS can go back to any unfiled year and assess a tax deficiency, along with penalties. However, in practice, the IRS rarely goes past the past six years for non-filing enforcement. Also, most delinquent return and SFR enforcement actions are completed within 3 years after the due date of the return.

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    The Costs Of Paying 2021 Taxes Late

    Although a tax extension gives you up to six extra months to file, it doesnt give you any extra time to pay. Taxpayers are still required to pay the estimated amount owed by Tax Day, which was April 18.

    While that can seem odd because you wont know exactly what you owe until you file, youre supposed to take your best guess. If you end up owing more than you paid, the IRS charges interest and failure-to-pay fees on the unpaid amount.

    Failure-to-pay fee. The failure-to-pay fee is equal to 0.5% of the tax owed after the due date for each month, or part of a month, that the tax remains unpaid. This amount can total up to 25% of what was owed.

    For example, if you file your tax return on Oct. 17 without making a payment on Tax Day and end up owing $1,000, youd also be required to pay 0.5% for each of the six months the total amount owed went unpaid. The final fee would likely be about $30.

    Interest charges. Additionally, youll be charged interest on any unpaid amounts. The interest rate for individual taxpayers is the federal short-term rate plus 3%. As of Oct. 1, taxpayers will owe 6% per year on underpayments.

    If, as in the example above, you file on Oct. 17 and owe $1,000 in taxes, youd also owe six months of interest. The interest charges would be based on half of the annual rate of 6% approximately 3% of $1,000, so would total $30.

    The main benefit of setting up a payment plan is to avoid other collection attempts by the IRS.

    Tax Deductions And Credits To Consider For Tax Season 2022 And 2023

    Taxes 2022: What to know ahead of the tax filing deadline

    The closest things to magic words when it comes to taxes are deductions and . Both help you keep more money in your pocket instead of Uncle Sams, but in slightly different ways.

    Tax deductionshelp lower the amount of your income that can actually be taxed. Some deductions are only available if you itemize your deductions, while others are still available even if you decide to take the standard deduction.

    Tax , on the other hand,are dollar amounts actually subtracted from your tax bill, and there are two types: refundable and nonrefundable. If a credit is greater than the amount you owe and its a refundable credit, the difference is paid to you as a refund. Score! If its a nonrefundable credit, your tax bill will be reduced to zero, but you wont get a refund. Still a win!

    Here are some deductions and credits you might be able to claim on your 2021 or 2022 tax return:

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    Were There Income Tax Changes At The Autumn Statement 2022

    Significant changes for income tax were announced as part of the Autumn Statement 2022.

    The personal allowance has been frozen at £12,570 until 2028 .

    This could lead to a higher tax bill if your earnings increase .

    In previous years, the personal allowance threshold rose in line with increasing earnings. But when its frozen, youll pay tax on more of your money.

    The additional rate threshold will also reduce to £125,140 in April 2023, meaning that more people will be pushed into paying the 45 per cent rate.

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    • Estimate your tax refund andwhere you stand

    • Know how much to withhold from your paycheck to get

    • Estimate your self-employment tax and eliminate

    • Know which dependents credits and deductions

    • Estimate capital gains, losses, and taxes for cryptocurrency sales

    • See which education credits and deductions you qualify for

    The above article is intended to provide generalized financial information designed to educate a broad segment of the public it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

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    Paid Family And Medical Leave Contributions

    Employers, other business entities and self-employed individuals electing PFML coverage are required to file Quarterly Returns through MassTaxConnect.

    The first required quarterly return will cover the period from October 1, 2019 to December 31, 2019 and must be filed on or before January 31, 2020. All subsequent return filings will be due on or before the last day of the month following a calendar quarters close.

    For more PFML information visit:

    Income Brackets And Rates For The 2022 And 2023 Tax Seasons

    New W2 Form For 2020

    Heres a refresher on how income brackets and tax rates work: Your tax rate is based on what tax bracket youre in.

    For example, if youre single and your income is $75,000, then youre in the 22% tax bracket. But that doesnt mean your tax rate is a flat 22%. Instead, part of your income is taxed at 10%, another part at 12%, and the last part at 22%.

    For the 2021 tax year, the tax rates are the samebut there are some slight changes to the brackets. Basically, the brackets have been adjusted by a few hundred dollars since 2020 to account for inflation.1 2022 tax brackets also look a little different.2

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    Contribute To Your Health Savings Account

    This medical account, available to individuals who have a high-deductible health plan, provides a tax-saving way to pay for out-of-pocket costs. You have until the April 18, 2022, tax deadline to contribute to an HSA for the 2021 tax year. The 2021 limits were $3,650 for an individual HSA owner and $7,200 for a family. For 2022, the individual coverage contribution limit is $3,650 and the family coverage limit is $7,300. If you’re 55 or older, you can put an extra $1,000 in your HSA.

    » MORE: Learn more about the tax effects of HSAs and flexible savings accounts

    Whats The Fastest Way To File My Tax Return

    The fastest way to file your tax return is to file electronically.

    E-filing your tax return to the IRS is more secure than paper filing. Because the tax return is electronically transmitted to the IRS, you dont have to worry about it getting lost in the mail or arriving late. Youll also get confirmation right away that the IRS has received your return and has started processing it.

    If youre waiting for a tax refund, the fastest way to get your money is to have it electronically deposited into your bank account. The IRS typically issues 90% of refunds in less than 21 days when taxpayers combine direct deposit with electronic filing.

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    Havent Filed In A While Or Have Never Filed A Return

    You have to complete and file an income tax and benefit return every year to:

    • receive certain benefits and credits to which you may be entitled
    • possibly get a tax refund
    • pay Canadian taxes you may owe

    There are different ways to file your income tax and benefit return if you:

    • have never filed a return before
    • havent filed in a while
    • would like to file returns for previous years

    You can go to our Get ready to do your taxes page. It has information on deadlines, and other tax tips that can be helpful for you. You can also get answers to frequently asked questions about filing your taxes at our Questions and answers about filing your taxes page.

    We can also help you Learn about your taxes. This year, we are launching a new online course to help you learn about taxes and empower you to do your taxes on your own. The free online course provides you with lessons that help you understand what taxes are, why we pay them, how to read your paycheques and income tax slips, and finally, how to do your taxes for the first time. Following each lesson, you can test yourself with exercises and quizzes.

    Tax Deadlines For Filing 2021 Returns

    Taxes 2022: What to do if you havent filed your return yet

    The IRS started accepting and processing tax returns for the current tax season from Monday, Jan. 24, 2022.

    The tax filing deadline is Monday, April 18, 2022. It was pushed out from the usual April 15th date due to Emancipation day and the subsequent weekend. Maine and Massachusetts residents have until April 19, 2022, per the reasons in the table below.

    Taxpayers who submit and receive an extension will have until Monday, Oct. 17, 2022, to file their return. However any estimated taxes due will have to be paid by April 18th to avoid potential penalties and interest.

    Given the number of government payments like the expanded CTC and catch-up stimulus checks , the average refund payment is nearly 10% to 15% larger than in prior years

    However filers should expect long refund processing delays again this tax season as the IRS has already indicated that they are still dealing with ongoing pandemic staffing/budget shortages and a large backlog of unprocessed returns refunds.

    See more on the expected tax refund schedule in 2022. You can also check your IRS tax transcript and processing cycle code to get more details on your refund payment.

    Also see more on the latest tax brackets and ideas to lower your taxes in 2022 by planning ahead.

    2022 Tax Season Deadlines

    Get the latest money, tax and stimulus news directly in your inbox

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    Will Tax Refunds Be Delayed In 2022

    The processing and refund delays seen in 2021 and likely to be repeated in 2022 can be traced in part to pandemic-related challenges, as well as issues with IRS staffing and funding. And as the omicron coronavirus variant sweeps the country, accountants and individuals themselves may face backlogs due to illnesses.

    Max Out Your 401 By Dec 31

    Contributions to a traditional 401 reduce your total taxable income for the year.

    For example, lets say you make $65,000 a year and put $19,500 into your 401. Instead of paying income taxes on the entire $65,000 you earned, youll only owe taxes on $45,500 of your salary. In other words, saving for the future lets you shield $19,500 from taxes . Many employers offer to match a portion of what you save, meaning that if you contribute enough to your account, you’ll also nab some free money.

    » MORE: Estimate your tax bill with our free tax calculator

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    Should I Use A Tax Advisor To File My Taxes

    Whether you choose to use a tax advisor or file on your own depends largely on your unique situation. Many people choose to file on their own if their tax situation is fairly simple and theyre looking for cost-savings.

    We typically recommend TurboTax if a client prefers to prepare their own income tax returns, says Raven.

    The more complex your taxes, however, the more you will benefit from using an advisor. For example, if you are self-employed, own rental properties, have income from stock or other property, or dealt in cryptocurrency, you may want to consider working with a professional.

    What are the benefits of working with a tax advisor? Experience, knowledge, consistency, clarity, advice, and strategy are just some of the benefits, according to Raven.

    If a client values strategy, quality, money, and service, then thats a great match for a taxpayer-accountant combo. If a client values cost and time, then they may be better off self-preparing their taxes using TurboTax or other tax-filing software, she adds.

    Additionally, there are accountants who just fill in the numbers for you, and there are accountants who help build a strategy for enhancing your overall financial health. With someone who just fills in the numbers, they may take the weight of completing taxes off your shoulders, but they arent always going to help you find the best ways to maximize your tax returns and provide sound advice on managing your overall financial wellness.

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