Last call! Taxes must be filed by Monday April, 2022 in the US! If you are one of the 15 million Americans who’ve yet to file taxes, here is some information for you from a Fast Company article posted 4-15-22.
DO I NEED TO FILE AN EXTENSION BY MONDAY?
If you’re not ready to file 2021 taxes, yes it’s important you file an extension by Monday, April 18th. There are a few exceptions to this rule. The Internal Revenue Service (IRS) has already granted an automatic extension for taxpayers who live in certain regions of Arkansas, Colorado, Kentucky, and Tennessee that were deemed disaster areas this year. People who live in those areas don’t have to file until May 16, and they don’t have to make tax payments until then, either. People who live in parts of Puerto Rico get even longer—until June 16. You can learn more specifics on the dedicated “around the nation” page on the IRS website.
FINE, I’LL GET AN EXTENSION. HOW DO I THAT?
The IRS actually makes this pretty easy. It has a list of partner companies that let you request an extension through its Free File program. If you already use an accountant or a tax-preparer service, such as TurboTax, you can request an extension that way, too.
GREAT, NOW I DON’T HAVE TO PAY TAXES UNTIL OCTOBER?
Nope! If you owe on your taxes this year, you still have to pay by Monday if you want to avoid a penalty. The IRS suggests you estimate how much you owe and then just make a payment via your tax account.
I NEVER GOT A STIMULUS CHECK LAST YEAR. CAN I CLAIM THAT?
Maybe, but you have to make sure you actually qualified to receive one. The easiest way to do that is to sign into your online tax account and view the “payments” section. This will list payments the IRS has made to you, including stimulus checks. If you see a check there, but you truly never received it—or you only received part of it—you can claim it as a Recovery Rebate Credit on your tax return. Separately, the IRS should have sent you a letter informing you of your eligibility.
However, and this is the important part, you have to make sure you calculate the correct amount. If you mess it up, the IRS will have to adjust your return, and that could delay your refund. Take it from the millions of taxpayers whose refunds from 2021 and 2020 are still being processed. You don’t want to end up in Manual Review Hell.
The IRS knows this whole business of stimulus checks and rebate credits is far more complicated than it should be, so it recently updated its FAQ page on the topic. It’s recommended reading if you’re planning to claim the credit.
THIS IS ALL TOO MUCH. CAN I JUST NOT FILE MY TAXES AT ALL?
You’re in good company if you feel that way this year, especially given the aforementioned processing backlogs that have delayed so many refunds. However, you are opening yourself up to a world of headache and heartbreak in the form of penalties and interest if you throw up your hands and quit, including a failure-to-file penalty. According to the IRS, you won’t be hit with a failure-to-file penalty if you’re owed a refund, but if you wait too long, you might lose that refund forever. Bottom line: It’s just better to file and get it over with.
All that said, not everyone is required to file a tax return every year, including people who make under the income threshold. The IRS has a handy tool to help you decide if you’re one of them. Find it here.
Check out ID.me to establish and/or access your IRS online account for up the minute information: https://www.id.me/
IF YOU’RE SELF EMPLOYED
If you’re self-employed, it’s not just your tax return you’ll need to submit by April 18. You’ll also need to submit your first estimated quarterly tax payment. And if you’re late with that money, you could end up facing costly penalties from the IRS.
Salaried workers commonly have taxes withheld from their paychecks. But self-employed workers aren’t taxed on their wages. For all self-employed workers, it’s on you to pay the IRS a portion of your earnings each quarter of the year.
The IRS requires you to pay as you go, so to speak. And so you’re required to pay taxes on your income on a quarterly basis.
If you don’t make your estimated payments on time, the IRS will penalize you for being late. Just as those who don’t settle their 2021 tax debts by the filing deadline face a late payment penalty of 0.5% per month or partial month they’re late, you will also face a similar penalty if you aren’t timely with your estimated quarterly payments.
Life is like a puzzle! There are many pieces and it’s up to you to put them together in a way that works for you. If you’re ready to jump in and work on those pieces of your life, reach out anytime by email: Lynn@thelivingplanner.com to find how best to get you started.
Check out all my online offerings, resources, and information focused on the interconnected aspects of life: https://bit.ly/LPCourses. Tuesday, I’m holding a Live Interactive Webinar 5 Practical Tips Before Kids Leave Home Join us! https://courses.thelivingplanner.com/live-webinar/5-practical-tips-before-kids-leave-home/register
Feel free to send along any feedback anytime 🙂 –Lynn
“Spring work is going on with joyful enthusiasm” –John Muir
. #CareForPeopleCareForBusiness #LifeHacks