Submit your file before the deadline to avoid penalties and interest
While April 15 is the federal deadline for most taxpayers, Maine and Massachusetts filers have until April 17. There are also automatic extensions for certain taxpayers affected by natural disasters.
But if you miss the tax filing deadline and owe a balance, you can expect penalties and interest from the IRS.
If you fail to file, the IRS charges 5% of your unpaid taxes per month or partial month, capped at 25% of your balance due. The late payment penalty is 0.5% per month or part of a month, with a maximum of 25% of unpaid taxes. Interest is based on current rates.
If you are missing tax forms, the tax deadline is your last chance to file an extension, which pushes the filing deadline back to October 15. But the “extension to file is not an extension to pay,” warned certified financial planner Sean Lovison. , founder of Purpose Built Financial Services in the Philadelphia area.
The file extension is not a paid extension.
Sean Lovison
Founder of purpose-built financial services
According to the IRS, those who can’t pay their taxes by the deadline have options. They can request a payment plan, or “installment agreement,” to pay off their balance over time.
Two-thirds of taxpayers can expect a refund
If you don’t file, you could forgo a refund, Werfel said on “Squawk Box.”
“Two out of three taxpayers who are going to file before tonight’s deadline actually need to be refunded,” he said. “So it’s in your best interest to do your taxes.”
As of April 5, the IRS had processed nearly 67 million refunds, with an average payment of $3,011, an increase of 4.6% from last April’s refund, the agency reported Friday.
“Don’t go to the post office,” Werfel said. “File electronically, select direct deposit and we’ll refund you in less than 21 days.”
How to file your taxes for free
This season, taxpayers have several ways to file their federal taxes for free, and there’s still time to use a few digital options.
Most Americans qualify for IRS Free File, which offers free guided tax preparation software from multiple partners. The adjusted gross income limit is $79,000, but each partner has different eligibility requirements.
“It’s a product that we’re very proud of,” Tim Hugo, executive director of the Free File Alliance, told CNBC. “We just wish more people knew about it.”
This season, millions of taxpayers are also eligible for IRS Direct File, a free tax filing pilot program from the agency. Currently, Direct File is open to select filers in Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.
As of April 15, some 100,000 taxpayers have successfully filed their returns via Direct File, according to a Treasury official. Werfel said an announcement on the future of the program would be made “later this spring” but that “the results so far have been encouraging.”
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