Tax Day is here. Today is the last day for most taxpayers to file their 2023 returns. Don’t believe you can file? Today is also the deadline to request an extension, which gives you six extra months to submit and significantly decreases any potential fines or interest costs for filing late.
By April 5, the IRS had processed slightly over 100 million of the 101.8 million returns it had received. The average refund to date is $3,011, compared to $2,878 last year at this time.
The IRS expects you to pay your income taxes regularly, either by withholding from your paycheck or making estimated payments.
If you don’t, you may face an underpayment penalty.
You may face a penalty if you fail to pay enough tax on time, either through withholding or estimated tax payments.
To avoid the penalty, aim to pay your estimated taxes on time. You may be eligible to avoid the penalty if you paid at least 90% of the current year’s tax or 100% of the previous year’s tax, whichever is smaller, or if you owe less than $1,000.
The underpayment penalty is determined using the unpaid amount, the period during which you underpaid, and IRS-set interest rates.
More than $1 billion in tax returns remain unclaimed, and the clock is ticking.
The Internal Revenue Service recently stated that over 940,000 Americans are yet to file tax returns for the 2020 tax year, with many expecting refunds. They have until May 17th.
“There’s money remaining on the table for hundreds of thousands of people who haven’t filed 2020 tax returns,” IRS Commissioner Danny Werfel said in a release.
Where is my refund?
Wondering why your refund has not arrived? Here’s what to do.
First, check the calendar. Most refunds are issued within 21 days after receipt, according to the IRS.
Next, check with the IRS. The “Where’s My Refund” tool can assist you in tracking your return.
As of late March, the agency was processing 88.8 million returns, compared to 89.7 million the previous year.
If your return is delayed, the IRS lists several possible causes:
- It was sent by mail
- It contains errors or is incomplete
- It needs further review
- It is affected by identity theft or fraud
- It was referred to the IRS by the bank due to suspicious activity
- It includes an Injured Spouse Allocation form, which could take up to 14 weeks to process
You should always fill out a Form W-4
According to the Internal Revenue Service, you should fill out a Form W-4 so that your employer can withhold the appropriate federal income tax from your paycheck.
Filling out this form correctly will help you avoid having to pay taxes when you file your return.
According to the Internal Revenue Service, you should “consider completing a new Form W-4 each year and when your personal or financial situation changes.”
The IRS’ most recent version of the W-4 form is available on its website.
Tax Day 2024: All about retirement contribution
You just have one more day – to contribute to your retirement account and take advantage of the 2023 tax reduction.
You can contribute to an IRA until April 15 and have the funds count toward your 2023 savings. The donation limit for 2023 is $6,500 if you’re under 50 and $7,500 if you’re older.
“There is a 15-month window to make IRA contributions for any given year,” said Mary Ryan, a certified financial planner at Vanguard.
Tax Day 2024: Major stats
- The average amount reimbursed by direct deposit through April 5 is $3,088, up from $2,942 last year, or a 4.9% increase.
- The overall number of returns received by the IRS to date is 101.8 million, up from 101.3 million at this time in 2023.
- The IRS had processed 100.1 million returns as of April 5, compared to 100.4 million at the same time last year.
- Visits to the IRS website have increased by an impressive 18.2%, from around 421 million last year to 497 million this year. The agency is aiming to enhance customer service.
