The Internal Revenue Service (IRS) has issued a reminder to taxpayers, including self-employed individuals, retirees, investors, and businesses, regarding the upcoming deadline for 2023 tax year. If you fall into any of these categories, mark your calendar for April 15, 2024.

Remember that tax laws and filing requirements can change, so it’s essential to consult the latest guidelines from the relevant tax agency or seek assistance from a qualified tax professional to ensure you meet all the necessary requirements and deadlines.

Consequences of Missing Tax Deadlines

When you miss a tax deadline, you may face two types of penalties:

1. Failure-to-Pay Penalty:

   • The failure-to-pay penalty applies when you don’t pay your taxes on time.
   • The fee is 0.5% of the unpaid taxes for each month (or part of a month) the tax remains unpaid.
   • However, this penalty will not exceed 25% of the total unpaid taxes.
   • In other words, it gradually increases the longer the taxes remain unpaid.

2. Failure-to-File Penalty:

   • The failure-to-file penalty occurs when you fail to submit your tax return by the deadline.
   • Typically, this penalty is 5% of the amount owed for the same time periods.
   • Like the failure-to-pay penalty, it also has a cap: 25% of the total amount owed.
   • This penalty encourages timely filing of tax returns.

3. Interest Charges:

   • In addition to penalties, the IRS charges interest on both types of penalties.
   • The interest accrues until the outstanding tax amount is paid in full.

4. State-Specific Penalties:

   • Keep in mind that penalties for missing state tax deadlines can vary.
   • Each state has its own rules and rates for late filings and payments.

Get an extension to file your tax return

If you need more time to file your taxes, you can request an extension through October 15. However, you must file your request by the April 15 deadline to get the extension. Make sure you pay any tax you owe by the April filing date. The extension is only for filing your return.

Again, it’s important to note that an extension only provides additional time to file your tax return, not to pay any taxes owed. If you owe taxes, you are generally required to estimate and pay the amount owed by the original tax filing deadline (April 15th). Failure to pay the estimated amount by the deadline may result in penalties and interest.

Extended Deadlines in Disaster-Affected Areas

In the wake of recent disasters, taxpayers in specific states have been granted extended deadlines for their 2024 estimated tax payments:

1. Tennessee, Connecticut, West Virginia, Michigan, California, and Washington: Deadline extended until June 17, 2024.
2. Alaska, Maine, and Rhode Island: Deadline extended until July 15, 2024.
3. Hawaii: Deadline extended until August 7, 2024.

Additionally, taxpayers living or conducting business in Israel, Gaza, or the West Bank, as well as those affected by terrorist attacks in the State of Israel, have until October 7, 2024, to make their estimated tax payments. For further details, visit the IRS’s page on Tax Relief in Disaster Situations.

We can help with your taxes!

What is your filing status and taxable income for 2024? We can help you calculate your tax liability based on the current tax brackets.

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