Getting your tax returns done on time is important to prevent unwanted penalties and interest from being applied. For those who get tax refunds, filing early can put money in your pocket faster. While you may want to file right at the start of the new year, you’ll need to wait for the right documentation to arrive from employers and vendors before you can start. In fact, the IRS won’t start accepting returns until sometime in late January or February.
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Tax Day is typically April 15th of each year. If April 15th falls on a weekend, Tax Day is pushed to the next business day. This year Tax Day is on April 15th, 2024.
Even though taxes for most are due by April 15, 2024, you can e-file (electronically file) your taxes earlier. The IRS likely will begin accepting electronic returns anywhere between Jan. 15 and Feb. 1, 2024, when taxpayers should have received their last paychecks of the 2023 fiscal year. The IRS will announce on its website when exactly you can file. Be sure you have received tax forms from all of your employers and financial institutions before you file your taxes. Some dividend forms will not go out until later in the year, and you can't file your taxes without all of your forms. That said, when it comes to filing your taxes, the earlier the better. If you are using Tax Software, many companies offer discounts or reduced pricing for early filers.
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Disclaimer: TurboTax's free version is available for simple tax returns only and not all taxpayers qualify.
“Your age, income level, and filing status will dictate whether you have to file your taxes,” says Christopher Jervis, an enrolled tax agent at Lone Wolf Financial Services LLC. While most people do have to file taxes, there are some exceptions, namely for income level. For example, if you’re 40 years old, single, and earned a total of $5,000 in the previous tax year, you don't have to file.
READ:
Do I Have to File Taxes?According to a draft of IRS document, these are the income thresholds that indicate a tax return must be filed for the 2023 fiscal year. At the time of this review, these thresholds have not been finalized.
In addition, you may have to file a return if you received advanced premium tax credits for health insurance or qualify for a refundable credit such as the American Opportunity Credit or Earned Income Tax Credit (EITC). Still unsure of whether you need to file a return? Visit the IRS Interactive Tax Assistant online or call the IRS at 1-800-829-1040 for a clear answer.
Each state has its own requirements for filing state taxes. If you live in a state that collects income taxes, turn to your state’s tax agency for information.
It can take less than 30 minutes to prepare your tax return for the tax year 2023. But taxpayers want to know when they can expect a refund. The IRS says that it processes most returns in less than 21 calendar days. It may take longer to process a tax refund if you filed for an Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC). For those with these credits, even filing early won’t accelerate payment as the IRS is unable to post refunds for these credits until mid-March.
How quickly you get your return will also depend on the method that you choose to receive it. Electing to use direct deposit is faster than getting a check mailed to you. Even then, the IRS reminds taxpayers that it can take your financial institution several days to post the deposit during tax season.
Things that can hold up processing a tax return include:
- Tax return errors
- An incomplete return
- Needs further review for credits and deductions
- You were affected by theft or fraud
- Claims EITC or ACTC
- Includes Form 8379, Injured Spouse Allocation (may take up to 14 weeks to process)
To properly file your tax return, you need to have the right information and documents in front of you. H&R Block has a simple checklist for you to use to make sure that you sit down prepared to file your return. That helps expedite the process of filing and reduces the chances of errors which can delay getting refunds.
You’ll need the personal information of you and your spouse. Personal information includes your legal name, social security number, and date of birth. If you have an Identity Protection PIN issued by the IRS, you’ll need this as well.
Make sure you have any advance Child Tax Credit payment information. Be sure to have the bank details for refunds that include the routing and account numbers.
You’ll also need complete information for your dependents. You’ll need their date of birth, social security number, and all records for child care that include the provider’s tax ID number. If you have an adult dependent, you need to have their income available as well.
Once you have all personal details inputted into the tax return, the next section is usually your income sources. This starts with a W-2 or 1099 income. It includes any unemployment income you received as well. For business owners, you may also have a Schedule K-1 that reports income. Those who are self-employed will want to have their check register of income and expenses available to complete the income section. Income also includes money from rental properties, retirement plans, savings, and investments.
After you have completed the income section, it’s time to review your deductions. While many people with few deductions are best suited to use a standard deduction, those with a lot of deductions are often better off if they itemize them. Deductions include mortgage interest, charitable donations, medical expenses, and health insurance. Childcare expenses and educational expenses are also considered here.
You will face serious penalties if you file your taxes late. According to Mike D’Avolio, CPA and senior tax analyst at Intuit, these include the following.
- Interest: The IRS will charge you interest on any taxes you don't pay by the due date. This is true even if you’ve been granted a filing extension. You'll also have to pay interest on penalties from the due date of your return (including extensions).
- Late Filing Penalty: The late filing penalty is 5% of the tax owed after the due date, for each month or part of a month the tax remains unpaid, up to 25%. The penalty is capped at 25% of the tax due. If your return is more than 60 days late, the minimum penalty will be $435 or the amount of any tax you owe, whichever is smaller. You may be excluded from this penalty if you have a reasonable explanation.
- Late Payment of Tax: If you pay your taxes late, the penalty is usually .5% of the unpaid amount for each month or part of a month the tax isn't paid. The penalty can be as much as 25% of the unpaid amount. It applies to any unpaid tax on the return. Note that this penalty is in addition to interest charges on late payments.
In most cases, failure to file your taxes will result in penalties and fines but not jail time. “However if you’re found guilty of tax evasion or not reporting all your earnings to the IRS, you may go to jail,” says Josh Zimmerman, CPA and founder of Westwood Tax & Consulting. He noted that tax evasion is a felony, punishable by up to five years in prison. You can also go to jail for up to a year for each tax return you voluntarily refuse to file. Additionally, failing to report foreign bank and financial accounts on your taxes may result in up to 10 years in prison.
“The IRS makes it clear that you cannot be put in jail for not having enough money to pay your taxes, but you still must file and work with the IRS on a payment plan,” says Jason Field, a financial advisor at Van Leeuwen & Company LLC.
The requirement to file a tax return is based on income rather than age. “You could be required to file a return if you’re a newborn or 80 years old, as long as you meet any of the income thresholds that require a return,” Rives says.
If you’re a retiree who only has Social Security income, you probably don’t have to file a return because Social Security (without other income) is generally nontaxable. Your situation may be similar if you no longer work and collect disability or veteran benefits.
Your tax filing status and age will determine how much you can make without filing taxes. According to a draft of IRS Publication 501, you don’t have to file taxes for 2023 if you’re single, under 65, and earned less than $12,550. Note that these numbers have not been officially published at the time of this review. Refer to our Do I Have to File Taxes? section of this article for further details.
If you’d like more time to file your taxes, you’ll need to submit Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return) by April 18, 2022, or your particular tax deadline. With a tax extension, you can extend your filing due date by six months, up to October 15. “The extension will only extend time to file your taxes, not time to pay," Jervis says. “If you owe or expect to owe, your payment will be due on your regular due date, before your extension.”
To file an extension for your state taxes, check your particular state’s guidelines. Most states follow the federal tax extension rules.
Why You Can Trust Us: 13 Tax Software Programs Researched
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