April Tax Filing Tips
The Tax Returns are due April 18, 2022.
The IRS begins accepting tax returns in late January. If you need to complete your tax return in April, the following are tips that may be helpful for a last-minute tax filer.
1. Have your taxes filed electronically. The IRS is sitting on a massing backlog of unprocessed tax returns from previous tax years. Sending your taxes in on paper, you might end up waiting a really long time for your refund to deposit in your bank account. Filing electronically generally takes the IRS half the time to process electronically filed returns as it does for the agency to process paper returns. When filing electronically you'll be less likely to have errors and prevent your tax return from getting rejected.
2. Max out your IRA or HSA if you owe the IRS a large sum. If you realize you owe taxes, you still have time to make a contribution. You have until the tax-filing deadline, April 18 this year, to max out your 2021 IRA or HSA.
3. Get an extension if you won't finish in time. To do this request one by April 18, and you'll automatically get six more months to file your taxes.
Why does an extension matter? If you don't owe money on your taxes - it doesn't. If you owe the IRS any amount of money, you'll be assessed a failure to file penalty equal to 5% of your unpaid tax bill for each month or partial month your return is late. And an extension can avoid that penalty.
The extension won't give you more time to pay your actual tax bill. If you don't pay the IRS what you owe by April 18, you'll start to accrue penalties and interest on that sum - but at least you'll avoid the failure to file penalty.
A lot of folks enter April without having there taxes completed - if your in this situation - strategically plan to get completed and contact a tax professional.