The federal income tax filing deadline has arrived and the IRS estimates it
will receive approximately 12 million 2016 federal income tax returns and
nearly 8.4 million extension requests in the final days of the filing season.
For those taxpayers who have yet to file, the IRS offers this advice:
- E-file The IRS encourages
taxpayers to file electronically. E-file vastly reduces tax return errors,
as the tax software does the calculations, flags common errors and prompts
taxpayers for missing information. Free
File partners make their brand-name software products available for
free to taxpayers earning $64,000 or less. Taxpayers who earned more may
use Free File Fillable Forms. For the first time, taxpayers also can
prepare their taxes from their mobile phone or tablet as well as computer.
Taxpayers who changed tax software products, either using Free File or
other software products, this year may be asked for their Adjusted Gross
Income to verify their identity. See Validating
Your Electronically Filed Tax Return for details.
- Refunds The fastest way for
taxpayers to get their refund is to e-file and have it electronically
deposited into their bank or other financial account. The IRS issues more
than nine out of 10 refunds in less than 21 days. Taxpayers waiting to
receive their refunds can use the “Where’s
My Refund?” tool on IRS.gov or check the status of their refund
through the smartphone app, IRS2Go.
The “Where’s My Refund?” tool is updated once daily, usually overnight, so
there’s no reason to check more than once per day or call the IRS to get
information about a refund. Taxpayers can check “Where’s My Refund?”
within 24 hours after the IRS has received an e-filed return or four weeks
after receipt of a mailed paper return. "Where’s My Refund?" has
a tracker that displays progress through three stages: (1) Return
Received, (2) Refund Approved and (3) Refund Sent.
- Payment Options Many taxpayers who owe
money often wait until the last minute to file. Taxpayers who owe have
many payment
options. They can pay online, by phone or with their mobile device
using the IRS2Go app. Available payment options include Direct
Pay; Electronic Federal Tax Payment System (EFTPS); electronic funds
withdrawal; same-day wire; debit or credit card; check or money order; or
cash. Some of these options are free; others require a fee.
- File an Extension Taxpayers who are not
ready to file by the deadline should request an extension.
An extension gives the taxpayer until Oct. 16 to file but does not extend
the time to pay. Interest and penalties will be charged on all taxes not
paid by the April 18 filing deadline. Although some people automatically
get an extension – such as those in a federally declared disaster area –
most people need to request one. One way to get an extension is through Free
File on IRS.gov where some partners offer free electronic filing of
the extension request. Extensions are free for everyone, regardless of
income. Another option for taxpayers is to pay electronically to get an
extension. IRS will automatically process an extension when taxpayers
select Form 4868 and they are making a full or partial federal tax payment
using Direct Pay, Electronic Federal Tax Payment System or a debit or
credit card by the April due date. There is no need to file a separate
Form 4868 when making an electronic payment and indicating it is for a
4868 or extension. Electronic payment options are available at IRS.gov/payments.
Taxpayers can also download, print and file a paper Form 4868 from IRS.gov/forms.
The form must be mailed to the IRS with a postmark on or before midnight
on April 18.
- Penalties and Interest Taxpayers who are
thinking of missing the filing deadline because they can’t pay all of the
taxes they owe should consider filing and paying what they can to lessen
interest and penalties. Penalties for those who owe tax and fail to file
either a tax return or an extension request by April 18 can be higher than
if they had filed and not paid the taxes they owed. That’s because the
failure-to-file penalty is generally 5 percent per month and can be as
much as 25 percent of the unpaid tax, depending on how late a taxpayer
files. The failure-to-pay penalty, which is the penalty for any taxes not
paid by the deadline, is ½ of 1 percent of the unpaid taxes per month. The
failure-to-pay penalty continues to accrue on any unpaid tax balance and
can be up to 25 percent of the unpaid amount. Taxpayers must also pay
interest, currently at the annual rate of 4 percent, compounded daily, on
taxes not paid by the filing deadline.
- Installment Agreements Taxpayers who find they
are unable to pay the entire amount of taxes due should consider filing
the return and requesting a payment agreement. Most people can set up a
payment plan with the IRS online in a matter of minutes. Those who owe
$50,000 or less in combined tax, penalties and interest can use the Online
Payment Agreement application to set up a short-term payment plan of
120-days or less, or a monthly payment agreement for up to 72 months. With
the Online Payment Agreement, no paperwork is required, there is no need
to call, write or visit the IRS and qualified taxpayers can avoid the IRS
filing a Notice of Federal Tax Lien unless it previously filed one.
Alternatively, taxpayers can request a payment agreement by filing Form
9465. This form can be downloaded from IRS.gov and mailed along with a
tax return, IRS bill or notice.
No matter how or when they file, taxpayers are
reminded to keep a copy of their tax return and all supporting documents.
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