The deadline for submission of their returns is Oct. 17 for the roughly 19 million taxpayers who asked for an extension earlier this year. The IRS has urged people not to rush to file by submitting their returns electronically ahead of the October deadline.
Filing your taxes electronically is the easiest way to get a refund, according to the IRS, especially as the agency works its way through a backlog of paper returns.
An extension gives filers time to review their return and take advantage of all the tax benefits that are available to them to help reduce their liability, like various deductions and credits.
By pushing back the filing date, taxpayers can avoid a failure-to-file penalty by extra 5% per month on the unpaid amount of money owed, which can add up to 25% of the tax due. You have until October 17 to file for an extension before the penalty starts.
The ratio was closer to 1 in 10 Americans asking for an extension this year, but this year the ratio was closer to 1 in 8. That's because of additional challenges for filers this year that are related to the COVID 19 stimulus payments and the expanded child tax credit. Filers don't have to owe money on the stimulus payments, but they still need to enter the amount they received on their returns in order to match IRS records.
The IRS has similar requirements for the child tax credit, because at least half of the enhanced credit will be paid out as a lump sum when parents receive their 2021 tax return, so recipients are required to reconcile the credit they already received when filing their taxes this year. The information is pertinent to determining how much money families get from credit when they fill out forms.
If you want to get a refund this year and you ask for an extension, you won't get that money until you've filed your return. The sooner you file, the sooner you get your refund. The IRS asked Americans who expect to receive money to file a refund as soon as possible.
If you didn't pay your full tax bill on April 18, and are still unable to do so, tax experts advise that you request a payment plan for the remaining balance.
Some payment plans are offered by the IRS for individuals who are unable to pay the full amount of taxes they owe.
There are some taxpayer exceptions to the October deadline: The IRS announced last week that hurricane Ian victims who live in Florida and have a valid extension to file their tax returns by October 17 have until February 15 to submit their returns. That February deadline applies to victims of storms and flooding that started on Sept. 15 in parts of Alaska and Hurricane Fiona victims in Puerto Rico.