Tax Return: 2 Key Possibilities of Late Filing

The tax deadline for 2021 is Monday, April 18th, which gives you two weeks to file your return. More than one million arithmetic mistakes were found on tax returns in 2020, according to the Internal Revenue Service.

According to Matthew Burr, a local expert, submitting ahead of time is one approach to minimizing errors and earning the best possible return when making a claim. The federal government has increased the child tax credit and the earned income tax credit, but a tax expert claims that more than one-fifth of Americans are unaware of their eligibility or how to claim these benefits, resulting in billions of dollars in unclaimed benefits each year.

If you need assistance, go to getyourrefund.org or contact 2-1-1 to find free tax preparation centers in your area before submitting your tax return. People should aim to save or pay off debt with their tax refund, according to Burr, because of inflation and rising costs, according to Inform NNY.

Late Filing of Tax Return

The IRS will not move the deadline for filing taxes forward. In other circumstances, it may even push the deadline back many weeks. For example, the IRS delayed the tax-filing deadline to mid-July during the first year of the pandemic. Even though the tax-filing deadline is not a secret, some people always miss it. And, whether you owe the IRS money or the IRS owes you, that's not a good thing.

1. Due to a Tax Refund

When you owe the IRS money, there isn't an IRS penalty for being late with your tax return. Instead, you'll have to accept a self-imposed penalty: you'll have to wait longer for the money to arrive in your bank account.

That doesn't only imply that you'll have to wait longer for money to spend on pleasurable activities. It may cost you in some circumstances. In certain situations, receiving your return sooner may help you avoid going into debt in the first place.

Many individuals are trying to make ends meet these days due to rising petrol prices and increasing living expenditures. If your salary is consistently short, but you owe the IRS $2,000, that refund might determine whether you pay your expenses in full or not. However, if you file your tax return late, you'll have to wait even longer to receive your money.

2. Owe the IRS money

You'll be fined if you owe the IRS money from 2021 and file your tax return late. You'll be fined 5% every month, or a partial month your return is late, up to a maximum of 25%.

However, you can avoid the penalty by obtaining a tax extension before the deadline. You'll have six additional months to file your tax return as a result. You won't be charged the 5% penalty for being late if you fulfill the extended deadline.

However, even if you receive an extension, your tax bill must be paid by the original filing date. You'll be fined if you're late with it, but only to a smaller extent than if you're late with your return, as per Fool.

Stimulus Payment, Child Tax Credit Could Cause Major Delays

Despite the fact that the IRS is working hard to clear a backlog of tax returns, If you claimed stimulus funding and made any mistakes - from typos to misrepresentation - your tax refund might be delayed. If you forget how much advance Child Tax Credit you earned - and you don't have Letter 6419, which helps you balance your advance CTC payments - you can claim the erroneous amount on your 2022 return.

Tax experts advised The Detroit Free Press that if you make a mistake on your tax return and the IRS owes you a refund, and you should wait before taking action. "No new tax return, no revised tax return, no paper submitted tax return," said Mark Steber, chief tax officer at Jackson Hewitt Tax Service.

The bad news is that you may have to wait six to twelve weeks for the IRS to notice and correct the error before receiving your refund. That's why the IRS warns taxpayers against counting on their tax return check to arrive within 21 days or using the funds to make a significant, one-time purchase or pay payments that may be due.

However, if you owe the IRS money, things might become a lot worse. If you make a mistake on your tax return, you might owe the IRS money and face fines and interest if you don't pay by April 18. If this is the case, Steber recommends filing an updated return that accurately displays your tax due, as well as paying the amount before the deadline, Go Banking Rates reported.