Pay What You Can Without Compromising Basic Necessities
If youre not able to pay the full amount of the taxes you owe by the tax filing deadline, the IRS will charge you interest on the outstanding balance. The interest rate is subject to change each quarter and is calculated by adding 3 percentage points to the federal short-term interest rate.
Paying as much as you can by the deadline is your best strategy. The more you pay towards your balance before its late, the less youll have to pay in accrued interest and penalties.
Heres some more info from the IRS about penalties and interest.
Types Of Tax Credits And Benefits
There are two types of tax credits:
Benefits can help with various living expenses, such as raising children, housing, loss of income and medical expenses.
Read the Canada Revenue Agency’s General Income Tax and Benefit Guide and Forms Book to learn more about which tax credits you can claim.
With the Ontario Child Care Tax Credit, you could get back up to 75% of your eligible child care expenses. It applies to eligible child care options, including care in centres, homes and camps.
The Low-Income Workers Tax Credit provides up to $850 each year in Ontario personal income tax relief to low-income workers, including those earning minimum wage.
What’s The Deadline For Filing Your Federal Tax Return
- The deadline for filing federal taxes this year for most taxpayers is Monday, April 18.
- Taxpayers in Maine and Massachusetts, however, have until because of the observance of Patriots’ Day in those states.
- The IRS has also announced extended federal tax filing deadlines for victims of winter storms in parts of Tennessee, Illinois and Kentucky, and victims of wildfires in Colorado. An extended May 16 deadline is limited to affected counties, which can be found on the IRS’ page on tax relief in disaster situations.
- In addition, if you’re serving in the military abroad, including in a combat zone or as part of a contingency operation in support of the US Armed Forces, you may be granted additional time to file your return.
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Reasons To File A Tax Deadline Extension
You may want to file a tax deadline extension for a number of reasons. For the majority of people, it makes more sense to just file your taxes on time. This is because you will either delay receiving a refund if youre getting one, or you could end up paying penalties and fees if you owe tax and didnt pay on time. Here are the top reasons you may consider filing an extension:
- Your returns arent done: If you havent had enough time to thoroughly go through your return and make sure its accurate and has taken advantage of all the possible deductions, then you may want to file an extension.
- Missing information: If you havent received information from an employer, for example, you wont be able to file on time.
- You know youre receiving a refund: If you know youre getting a refund and want to push receiving it until the fall, then filing an extension might work well for you.
- Your business filed an extension: If you have business taxes that are falling to your personal tax return and the business filed an extension, then youll likely be forced to file one for your personal returns as well.
Keep in mind that you should be very careful about filing an extension if you think youre going to owe tax to the government. You dont want to be hit with penalties or fees for not paying on time. You also want to be careful that if you are extending to make sure you file the proper paperwork so that you dont receive a no-file penalty as well.
Dont Miss The Tax Filing Deadline
When you work in the US, youll be taxed on your income and if you earn over a certain amount, you must file a tax return. In 2021 for example, if you are under 65 and single, you must file a tax return if you earn $10,350 or more. The deadline for filing your 2021 tax return is April 15, 2022. You must prepare it and post it to the IRS.
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What If I Dont Normally Have To File Taxes But Want To Claim A Missing Stimulus Check
If you typically arent required to file taxes because youre on SSI or SSDI, youre retired, or you dont meet the IRS income threshold, but you need to claim missing stimulus money, you will have to file a 2020 tax return. The good news is, youll likely be eligible to use the IRS Free File program to do so. Weve got a guide for how nonfilers can get started filing their 2020 tax return to claim stimulus money here.
Tax Deadline For Quarterly Estimated Payments
If you’re self-employed, an independent contractor or have investment earnings, you might be curious about another set of deadlines: quarterly estimated payments. The IRS requires these quarterly estimated tax payments from many people whose income isnt subject to payroll withholding tax.
For estimated taxes, the answer to “When are taxes due?” varies. The year is divided into four payment periods, and each period has its own payment due date. Check below to see the dates for 2022.
If you earned income during this period
Estimated tax payment deadline
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Quick Tips For Filing On Time
Here are some things you can do to ensure you file on time by the deadline.
- Add the tax deadline to your calendar right now! Paper calendar, digital calendar, etc. Set up the deadline or a reminder so you dont forget.
- Grab a checklist to ensure you know what forms to start looking for in the mail and in your inbox. Check the items off as they come in. That leads to my next point
- Start a file folder for keeping all of your forms in one place. Once youre ready to file youll know exactly where to find everything.
Do I Have To File An Extension With My State
That depends. Once you’ve requested an extension from the feds, check if you’ll need to do so for your state. According to the IRS, “State filing and payment deadlines vary and are not always the same as the Federal filing and payment deadline.”
Some states will automatically give you an extension on your state taxes if you receive a federal extension. In other states, you’ll need to request an extension separately. The Federation of Tax Administrators offers a rundown of how to check for tax information for the state you live in.
If you live in one of the nine states without personal income tax, you’re likely in the clear. However, two of those states New Hampshire and Tennessee still tax investment income, so, if you have earnings from dividends, stock sales or other investments, you may still have to file a state tax return in those states.
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Why Havent You Received Your Refund
The CRA may keep all or part of your refund if you:
- owe or are about to owe a balance
- have a garnishment order under the Family Orders and Agreements Enforcement Assistance Act
- have certain other outstanding federal, provincial, or territorial government debts, such as student loans, employment insurance and social assistance benefit overpayments, immigration loans, and training allowance overpayments
- have any outstanding GST/HST returns from a sole proprietorship or partnership
- have a refund of $2 or less
$15 Billion In Unclaimed 2018 Refunds
The IRS estimates 1.5 million taxpayers did not file a 2018 tax return to claim tax refunds worth more than $1.5 billion. The three-year window of opportunity to claim a 2018 tax refund closes April 18, 2022, for most taxpayers. If they do not file a 2018 tax return by April 18, 2022, the money becomes the property of the U.S. Treasury. The law requires taxpayers to properly address, mail and ensure the 2018 tax return is postmarked by that date.
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Natural Disaster Victims Get Tax Filing And Payment Extensions
If the Federal Emergency Management Agency declares a disaster area following a natural disaster, the IRS usually offers tax relief for the disaster victims in the form of tax filing and payment extensions. In the case of certain recent natural disasters, the April 18 tax filing and payment deadline was extended for individuals and businesses residing or located in the disaster area.
- Wildfires and straight-line winds in New Mexico that began on April 5 .
What Is This Year’s Filing Deadline
Typically, the tax filing deadline is April 15, but this year taxpayers have until April 18 to file because the 15th falls on Emancipation Day, which is observed as a holiday in Washington, D.C. As a result, IRS offices were closed on April 15.
Residents of Maine and Massachusetts get one extra day to file until April 19 because of those states’ recognition of Patriots Day on April 18.
Taxpayers who get an extension to file their taxes will have until October 17 to file their taxes. Typically, the extension gives people until October 15 to file their forms, but because that date falls on a Saturday, taxpayers have until the next business day, October 17, to file.
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What Happens To My Tax Deadlines If I Live In An Area Impacted By A Natural Disaster
If you need more time because you live in an area hit by a natural disaster, you might qualify for tax relief from the IRS. The IRS often postpones the tax filing deadline for taxpayers who live in or have a business within a federally declared disaster area.
For example, the IRS announced it would postpone tax filing and tax payment deadlines for taxpayers affected by the September 2020 California wildfires. Taxpayers in that area who extended their 2019 tax returns to October 15, 2020, now have until January 15, 2021, to file those returns.
Can I Get More Time To File Without Asking For An Extension
In the U.S., victims of natural disasters typically get more time to file taxes automatically. This year, victims of the December 2021 tornadoes and flooding in Arkansas, Illinois, Kentucky and Tennessee, as well as victims of the December wildfires in Colorado, have until May 16, 2022, to file their 2021 returns and pay any tax due. Victims of severe storms, flooding and landslides in Puerto Rico that began on February have until June 15 to file and pay.
This extension is granted automatically to addresses within a federally declared disaster area there’s no need to get in touch with the IRS to ask for an extension.
Also, military service members or support personnel in combat zones have more time to file. They have at least 180 days, or about six months, after they leave the combat zone to file their tax returns and pay any tax due, the IRS notes. A list of designated combat zones is here.
U.S. citizens and resident aliens working abroad also have until June 15 to file their returns and pay taxes due, although any unpaid taxes will accrue interest at the rate of 4%, componded daily, after April 18.
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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.
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What Happens If I Miss The Deadline
There’s an important distinction between filing late and paying late. If you need more time to prepare your tax return, you can request an extension from the IRS using Form 4868. If approved, you’ll get an extra five months, making Oct. 15 the deadline for your tax paperwork this year.
But here’s a big, hairy note of caution: Even if you’re approved for the extension, you still have to pay your estimated taxes by May 17 in order to avoid penalties. According to the IRS, the late payment penalty is “0.5% of the tax owed after the due date, for each month or part of a month the tax remains unpaid, up to 25%.” That’s just to start if you fail to pay for an extended amount of time, the fines increase. And there is a “failure-to-file” penalty as well.
But the IRS may waive the penalty if you can show “reasonable cause for the failure to pay on time.”
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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
Tax Day 202: When Is The Last Day To File
The 2022 tax filing season began Jan. 24 and for a majority of taxpayers, the deadline to file your 2021 tax return is April 18.
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This start date is allowing the IRS time to perform programming and testing that is critical to ensuring IRS systems run smoothly. Taking this extra time will help ensure that eligible persons can still claim the child tax credit after reconciling their 2021 advance credits. This also gives individual taxpayers the time to claim any remaining stimulus money as a recovery rebate credit when they file.
Planning for the nations filing season process is a massive undertaking, and IRS teams have been working non-stop these past several months to prepare, said IRS Commissioner Chuck Rettig in a Jan. 10 statement. The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to help ensure their tax return and refund dont face processing delays.
An accurate return can avoid processing delays, refund delays and IRS notices.
To avoid delays, Rettig advises taxpayers to file electronically with current direct deposit information. He also recommends that those who received an economic impact payment or an advance child tax credit last year to make sure they report the correct amount on their tax return.
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Dont Wait Until The Deadline To File Your Taxes
Even though you have until April 18 to file your federal tax return, you shouldn’t wait until the last minute. For starters, the sooner you file, the quicker you get your refund. The IRS typically sends out 90% of refunds within 21 days after people file electronically and link their bank accounts, according to the tax-filing software company Turbotax. However, this year may be slower. The IRS announced it is facing a backlog of about 20 million pieces of correspondence that are creating what the Biden administration calls the most challenging tax season in the agency’s history.
Some Americans wont be eligible for refunds, though. And if you owe taxes, filing by the deadline is even more important. Even if you request a deadline extension , you must pay whatever you owe by the official deadline. If you cant afford to pay in full, you can set up a tax payment plan with the IRS. Added interest and penalty charges may still apply. So if you can pay what you owe, you should do so as soon as possible. Or at least pay as much as you can to avoid hefty penalty and interest charges.
Eric Bronnenkant, head of tax at digital investment advisor Betterment, says another top reasons to file early is to avoid identity theft.
A fraudster can illegally file on your behalf and claim your refund. From there, Bronnenkant says it would likely be difficult to get it back.
Do I Have To Pay Taxes On Unemployment Income
Yes, unemployment benefits received in 2021 are taxable.
The American Rescue Plan signed into law on March 11, 2021, allowed people with incomes of up to $150,000 to waive federal taxes on the first $10,200 of unemployment benefits collected in 2020. However, that exclusion does not apply to unemployment benefits received in 2021.
If you’re currently or have been recently unemployed and can’t afford to pay your taxes, make sure to file a return anyway there is a penalty for filing late or neglecting to file at all. Then, you can request an installment agreement to help you pay taxes over time. You can do this online through the IRS website, by filling out Form 9465, or by for help.
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