Wajiha Danish | April 1 2022
To tell the truth, it seems like there is never enough time to file returns. Even the COVID-19-affected deadline in 2021 came and went like a comet in the night sky.
Last year, taxpayers got an extra month to get their ducks in a row and file returns. This year also IRS gives us a little slack, yet it is just a mere weekend. As the federal tax deadline, April 15, falls on Emancipation Day, the 2022 taxes new due date is the next business day, April 18.
However, taxpayers from Massachusetts or Maine will get another day relief. Due to the celebration of patriot’s day in those states, their tax deadline is April 19.
As for relief, there are also some states that truly deserve a little breather. These include tornado-hit states like Tennessee, Illinois, and Kentucky and wildfire-affected states like Colorado. The due date for taxpayers in those states is May 16.
|DATES TO REMEMBER (FEDERAL TAX)|
|April 18||Deadline For 2021 Federal Tax Returns|
|April 19||Extended Tax Deadline (Maine or Massachusetts)|
|May 16||Deadline (Tennessee, Illinois, Kentucky, and Colorado|
Most states usually set their state tax deadline the same as the federal one. However, there are always some exceptions. Six states that don’t match taxes deadline and go their own way. Following are those six states and their respective state tax deadlines.
|SIX STATES WITH DIFFERENT STATE TAX DEADLINE|
However, unlike the federal tax deadline, state tax deadlines are subject to change, so it is best to stay current with the state department of revenue.
The tax deadline, April 18, is the last date to apply for an extension. Those who fail to do so get hit with late-filing penalties and other applicable penalties and interest charges.
The taxpayers who don’t file and pay taxes timely must pay failure-to-pay and failure-to-file penalties. The two may add up to 47.5% of the owed dues. Thus, applying for an extension before time saves taxpayers from one of the two; failure-to-file penalty.
However, there is no way to evade failure-to-pay interests and charges. You would have to pay those even if your extension is accepted. As per the IRS, the penalty is 0.5% of the unpaid tax amount per month until a full settlement is made.
Form 4868 is the one you need to submit to buy a six-month extension. It will extend your returns taxes due date to October 17.
No matter what you choose; to file or extend, every taxpayer must pay taxes before the original deadline, April 18. No extensions or delays are acceptable.
IRS hits you with fees and penalties for every month delay from that point forth. However, the question is how to know whether you owe IRS or not.
It’s simple. You can either hire a tax professional to give you an estimate of your taxes or you could put the math cap on and do it by yourself with the help of Form 1040 ES.
Though the dates match a bit, businesses follow their own tax calendar. Every business owner must remember these five dates to ensure their business stays tax compliant and save from tax penalties and fees.
Even though IRS gives you considerable time to file returns, it is best to never wait for the eleventh hour. There are two reasons behind it.
Firstly, it delays your refunds. The IRS is usually diligent in paying refunds and repays 90% of taxpayers within three weeks from the day the taxpayer files returns. So, the longer you stall, the longer you must wait to get back what’s rightly yours.
Secondly, delaying filing increases the risks of identity theft. Your refunds are never safe till you file and get it back. There’s a chance a fraudster may file on your behalf and run your refunds dry. Yes, there is a way to prevent identity theft, however, you have to go to IRS and set up an identity protection pin to do so.
Safe to say, it is best to avoid delay and keep your refunds safe. Pay taxes as soon as possible and stay in control of your finances.
Moreover, paying on time is not only beneficial for taxpayers with positive returns. It also helps those who must pay IRS and can’t afford to do so on time. The early filing gives you more time to set up a tax payment plan and ensures you don’t get the worst of penalties.
Wajiha is a Brampton-based CPA, CGA, and Controller with 17+ years of experience in the financial services industry. She holds a Bachelor of Science Degree in Applied Accounting from Oxford Brookes University and is a Chartered Certified Accountant. Wajiha spearheads Monily as its Director and is a leader who excels in helping teams achieve excellence. She talks about business financial health, innovative accounting, and all things finances.