In Balance Books

Missed the April 18 IRS Deadline? File Now to Reduce Penalties

The IRS due date for filing 2021 tax returns has passed, but taxpayers who missed the deadline still have many reasons to file as soon as possible. Both those who owe tax and those entitled to refunds will benefit from filing a 2021 return without further delay.

If you owe tax and did not request an automatic filing extension, filing your return now will minimize the late filing penalty. Even if you did request an extension, remember that the extension applies only to filing your return, not to paying your tax. By estimating how much tax you owe and paying now, you can reduce other IRS penalties and interest charges.

Some federal tax credits are also refundable, meaning that if you qualify, you may receive an IRS refund even if you owed no tax or had no tax withheld during the year. However, you generally must file a return to claim these credits and receive your refund. Common refundable credits include the Child Tax Credit (CTC), Earned Income Tax Credit (EITC), Recovery Rebate Credit, and Child and Dependent Care Credit.

Multiple IRS Deadlines Fall on April 18th – Important Reminders

2021 INDIVIDUAL FEDERAL TAX RETURN FILING: U.S. resident individual and joint tax filers, along with U.S. citizens must file 2021 Form 1040 or 1040-SR and pay any tax due. If you cannot file your return by the deadline, request an automatic filing extension to October 17th. However, if you expect to owe tax, estimate the amount and pay it by April 18th to avoid late payment penalties.

FIRST 2022 QUARTERLY ESTIMATED TAX PAYMENTS: If you earn income and either do not pay federal taxes through paycheck withholding or do not expect your withholding to cover your 2022 tax obligations, you may need to make quarterly estimated tax payments. In particular, this requirement applies to many self-employed taxpayers and “gig economy” workers. The first quarterly estimated payments for 2022 are due on April 18th, 2022.

DEADLINE FOR 2021 IRA AND HSA CONTRIBUTIONS: You may be able to treat contributions made by April 18th to your IRA or health savings account (HSA) as 2021 contributions, provided you have not reached your 2021 contribution limit.

2021 FEDERAL TAX AND 2022 ESTIMATED TAX DEADLINES FOR CORPORATIONS: Corporations must file their 2021 federal income tax returns and pay any tax due, and also make their first 2022 estimated income tax payments, by April 18th.

The IRS urges taxpayers who cannot pay the tax they owe to file by the April 18th deadline and pay what they can. By making a payment in any amount now and setting up a payment plan, you may be able to reduce penalties and interest charges.

Foreign Bank and Financial Accounts Reporting – Did You Know?

Taxpayers with foreign accounts, such as bank accounts or mutual funds, generally must disclose this information on their tax returns. In most cases, U.S. individuals, trusts, estates and businesses with foreign accounts that totaled over $10,000 any time in 2021 must also file a foreign bank accounts report, or FBAR by April 15, 2022.

The official name of the FBAR form is FinCEN Form 114, Report of Foreign Bank and Financial Accounts. FinCEN stands for the Financial Crimes Enforcement Network, a separate agency from the IRS. You must submit the FBAR directly to FinCEN – you cannot file it with your tax return. The standard FBAR filing deadline is April 15, although filers typically qualify for an automatic extension to October 15.