When’s The Earliest I Can File My 2021 Taxes
The IRS will begin accepting and processing 2021 tax returns on Jan. 24, 2022. That’s far earlier than last year’s Feb. 12 start date.
IRS Free File, a partnership between the IRS and leading tax-software companies, will launch on Jan. 14: The program allows taxpayers who made $72,000 or less in 2021 to file electronically for free, using software provided by participating providers. Those companies will accept completed returns and hold them until they can be filed electronically with the IRS on Jan. 24.
Most tax preparers and software programs allow you to file early with them and then submit your return with the IRS starting January 24. Check with your provider about their start date.
Easy Options For Filing An Extension
Option 1: E-file your federal tax extension in minutes withTurboTax Easy Extension
Using TurboTax Easy Extension, you can:
- E-file your federal extension
- Make a payment of any tax due directly from your checking or savings account
- Print a PDF copy of your e-filed extension
- Receive notifications when your extension has been accepted by the IRS
- Get easy instructions on how to file a state extension by mail
Note: Once your extension is approved, youll have until October 17, 2022 to file your return. If youre expecting a refund, it will not be processed until once you have completed your tax filing. If you think you owe, the estimated amount of taxes due will need to be paid to the IRS by the tax return filing due date.
Option 2: Print and mail your completed IRS extension form
If youd rather mail your extension directly to the IRS, simply refer to IRS Form 4868: Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, complete and print the form, and send it to the IRS address for your state.
If you owe federal taxes, include your estimated payment with your Form 4868 and mail itpostmarked by April 18, 2022 to avoid any penalties or interest. Then complete and file your return on or before October 17, 2022.
What Does It Cost To File A Tax Extension
It’s free to file a tax extension in any way that’s best for you: electronically or mailed. But not filing an extension and not filing your taxes by April 18 could be costly, which we’ll cover later.
Regardless of how much you owe, a tax extension is not a payment extension. In order to avoid a penalty, you’ll need to have paid at least 90% of the tax for the current year or 100% of the tax shown for the prior year, whichever is less.
For married couples filing jointly with adjusted gross income of $150,000 or higher, the withholding must be at least 110% of the total tax owed for the prior year . Generally, you can avoid the penalty if you owe less than $1,000. Special rules apply for certain individuals like farmers, fishermen and certain household employers.
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File Electronically And Opt For Direct Deposit For Your Refund
The IRS is encouraging taxpayers and tax professionals to file electronically once they have all the information they need to complete an accurate return. That will avoid delays in the processing and issuing of refunds and child tax credit and recovery rebate credits, the agency said.
“Going online ensures you get the full amount of credit and refunds you’re due,” Burhmann told CNET.
Using direct deposit is the fastest way to get any refund or credits due to you, according to Rettig of the IRS. Individuals can use a bank account, prepaid debit card or mobile app and will need to provide routing and account numbers.
What If You Need An Extension
The IRS is very particular about deadlines, and there are strict penalties for not meeting them. That doesnt mean, however, that you cant get more time if you need it you just have to ask for it correctly. Getting an extension doesnt mean you dont have to pay on time.
An extension will buy you time to get your documentation and paperwork in order, but you still have to estimate how much, if any, tax you will owe, and submit that amount when you file the extension request. If you dont, or if you underestimate significantly, the IRS could invalidate the extension, which would make you liable for penalties and interest in addition to any taxes you owe. You can get a free estimate of how much tax you owe by using TurboTaxs TaxCaster or H& R Blocks Tax Calculator.
The deadline for filing an extension is the same as the deadline for filing a tax return, so you must request the extension and pay your estimated taxes by then.
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Tax Extensions When Youre Living Overseas
You are allowed an automatic two-month extension to your time to file if you live abroad.
You qualify for this extension if your main place of business or duty station is outside the United States and Puerto Rico, or if you are in military service outside the United States and Puerto Rico.
This extension does require that you pay interest on any tax due that you didnt pay by the original filing deadline.
Also, the automatic two-month extension does apply to married couples who are filing joint returns, even if one spouse does not otherwise qualify for this extension.
If spouses file separate returns, only the one living overseas qualifies for the extension.
This extension is automatic. You do not need to apply for it in advance, but you do need to attach a statement to your tax return indicating how you qualify for the extension.
What Happens If I Miss The Tax Deadline
If you are owed a refund, there is no penalty for filing federal taxes late, though this may be different for your state taxes. Still, it’s best to e-file or postmark your individual tax return as early as possible.
If you owe the IRS, penalties and interest start to accrue on any remaining unpaid taxes after the filing deadline. The late-filing penalty is 5% of the taxes due for each month your return is behind, with fees increasing to up to 25% of your due balance after 60 days have passed. You may also incur a late-payment penalty, which is 0.5% of the taxes due for each month your return is late, with penalties increasing to up to 25% of your unpaid tax, depending on how long you take to file.
Another caveat: If you’re serving in the military — in a combat zone or a contingency operation in support of the armed forces — you may be granted additional time to file, according to the IRS.
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What Happens If You Don’t File An Extension And Miss The Deadline
If you don’t file your taxes by the deadline means the IRS will charge you interest on the unpaid balance and a late payment penalty, ranging from 5% to 25% of the amount owed each month it goes unpaid.
The failure to file penalty is 5% and the failure to pay penalty is 0.5% of the unpaid taxes for each month or partial month, up to a maximum of 25%. If both the failure to file and failure to pay penalties apply in the same month, the failure to file penalty is reduced by the amount of the failure to pay penalty for that month. For returns over 60 days late the minimum penalty is $435 or 100% of the tax required to be paid on the return, whichever is less.
For example, if you miss the April 18 deadline for 2021 without filing an extension, your late fee is 5%. If you owe $1,000, that’s a $500 penalty . That’s not even including interest. You’ll get charged interest on the unpaid amount until the entire bill is paid, Cook says.
Key Information To Help Taxpayers
The IRS encourages people to use online resources before calling. Last filing season, as a result of COVID-era tax changes and broader pandemic challenges, the IRS phone systems received more than 145 million calls from January 1 May 17, more than four times more calls than in an average year. In addition to IRS.gov, the IRS has a variety of other free options available to help taxpayers, ranging from free assistance at Volunteer Income Tax Assistance and Tax Counseling for the Elderly locations across the country to the availability of the IRS Free File program.
“Our phone volumes continue to remain at record-setting levels,” Rettig said. “We urge people to check IRS.gov and establish an online account to help them access information more quickly. We have invested in developing new online capacities to make this a quick and easy way for taxpayers to get the information they need.”
Last year’s average tax refund was more than $2,800. More than 160 million individual tax returns for the 2021 tax year are expected to be filed, with the vast majority of those coming before the traditional April tax deadline.
Overall, the IRS anticipates most taxpayers will receive their refund within 21 days of when they file electronically if they choose direct deposit and there are no issues with their tax return. The IRS urges taxpayers and tax professionals to file electronically. To avoid delays in processing, people should avoid filing paper returns wherever possible.
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Protect Yourself From Tax
Tax ID theft occurs when someone steals your personal information to file a tax return using your personal data. Usually, the fraudulent tax filer will use your Social Security number to file your return in order to collect a refund. To protect yourself from tax ID theft, you can obtain a six-digit Identity Protection PIN from the IRS. IP PINs are known only to you and the IRS so the IRS is able to confirm your identity when you file your return. Learn more about how the IP PIN works and how to apply.
File Electronically And Choose Direct Deposit
To speed refunds, the IRS urges taxpayers to file electronically with direct deposit information as soon as they have everything they need to file an accurate return. If the return includes errors or is incomplete, it may require further review that may slow the tax refund. Having all information available when preparing the 2021 tax return can reduce errors and avoid delays in processing.
Most individual taxpayers file IRS Form 1040 or Form 1040-SR once they receive Forms W-2 and other earnings information from their employers, issuers like state agencies and payers. The IRS has incorporated recent changes to the tax laws into the forms and instructions and shared the updates with its partners who develop the software used by individuals and tax professionals to prepare and file their returns. Forms 1040 and 1040-SR and the associated instructions are available now on IRS.gov. For the latest IRS forms and instructions, visit the IRS website at IRS.gov/forms .
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Filing An Income Tax Extension
If you aren’t able to complete your federal tax return by the filing deadline, find out how and when to file for an IRS extension with these tips from TurboTax.
For information on the third coronavirus relief package, please visit our American Rescue Plan: What Does it Mean for You and a Third Stimulus Check blog post.
You Might Want To Think More Seriously About Working With A Tax Preparer This Year
The pandemic and its impact on our lives have made taxes more complicated for many. “You might have gone freelance or moved and now owe taxes in multiple states,” Burhmann said.
In 2021, 26 states and the Washington, DC, changed their tax codes, either increasing or changing income taxes. So there are changes not just on the federal but state level, Burhmann said.
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What Is Form 4868
Form 4868 is known as the Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. When you complete the form, the IRS will automatically grant you a six-month tax extension .
Anyone can qualify for an automatic federal tax extension. The government wont even ask why you need extra time to file. So if youre expecting to miss the April 18, 2022, filing deadline for your 2021 taxes because youll be traveling, you can ask Uncle Sam for additional time to get your taxes together.
But theres a catch. If you want an automatic tax extension, youll have to plan for it in advance. Form 4868 is due every year on Tax Day. Once the April filing deadline passes, you wont be able to file for an extension, unless you are a U.S. resident or citizen living outside the U.S.
Even if the IRS receives your 4868 tax form by the tax deadline, youre still expected to pay any taxes you owe by April 18, 2022. If you cant make your tax payment on time, you may have to pay a penalty plus interest. But as long as you pay at least 90% of your tax bill by the April filing deadline, youll be able to avoid the late-payment penalty altogether.
Awaiting Processing Of Previous Tax Returns People Can Still File 2021 Returns
Rettig noted that IRS employees continue to work hard on critical areas affected by the pandemic, including processing of tax returns from last year and record levels of phone calls coming in.
“In many areas, we are unable to deliver the amount of service and enforcement that our taxpayers and tax system deserves and needs. This is frustrating for taxpayers, for IRS employees and for me,” Rettig said. “IRS employees want to do more, and we will continue in 2022 to do everything possible with the resources available to us. And we will continue to look for ways to improve. We want to deliver as much as possible while also protecting the health and safety of our employees and taxpayers. Additional resources are essential to helping our employees do more in 2022 and beyond.”
The IRS continues to reduce the inventory of prior-year individual tax returns that have not been fully processed. As of December 3, 2021, the IRS has processed nearly 169 million tax returns. All paper and electronic individual 2020 refund returns received prior to April 2021 have been processed if the return had no errors or did not require further review.
Taxpayers generally will not need to wait for their 2020 return to be fully processed to file their 2021 tax returns and can file when they are ready.
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How Do You File A Tax Extension
This one is easy. Youll need to fill out IRS Form 4868, then mail in your form or file it electronically using IRS e-file. To get an extension without the form, you can pay all of your estimated income taxes online. Youll get an automatic extension just by paying, but you do have to fill out your return eventually.
Go to IRS.gov to download the form or get more details about making a payment.
How To File A Tax Extension For An Individual
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Apply To Extend Your Accounts Filing Deadline
You should apply to extend your accounts filing deadline if theres an event outside of your control. But you must do this before your filing deadline.
Companies House will then consider your application and make a decision about your request. Theyll email you if this is successful or not, or if they need more information from you.
If they agree to extend your deadline, you must file your account before this new date or youll face a late filing penalty. This wont change any future accounts deadline dates.
Should You File A Tax Return Extension
The short answer is yes, when you need one.
Do you need more time to gather documents? Do you need more time to follow IRS instructions and figure out the tax code?
If you qualify for a payment extension, do you need more time to pay? Remember, if you arent able to pay your bill in full at the filing deadline, but you can finish your tax return accurately, make sure you either file the tax return or do an extension.
You want to avoid the failure-to-file penalty because it is an added unnecessary expense.
The IRS offers programs to provide relief for taxpayers including payment plans, penalty relief, and other forms of taxpayer relief for qualifying taxpayers.
Use an extension when it makes sense for your situation, but dont stick your head in the sand and hope that a negative tax situation goes away. The IRS doesnt forget.
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