Tax Services

The due date for filing individual income tax returns for the year 2023 is April 15, 2024, as set for the tax year 2024. However, it’s important to note that tax deadlines differ for startups and other businesses operating as corporations or limited liability companies (LLCs).

Every state independently establishes its tax filing deadline. To simplify matters, many states align their deadlines with the IRS and sync their state deadline with the federal one. Nevertheless, you may reside in a state that doesn’t impose state income taxes or has opted for a later filing date. Therefore, it’s essential to verify the 2023 filing deadline for your specific state by contacting your state’s department of taxation. Importantly, no state sets a filing deadline prior to the federal filing date of April 18th.

Meeting the IRS tax deadline is crucial to avoid potential issues. However, if you need more time, you can request a free extension until October 15. It’s important to note that this extension grants you extra time to file, but any owed taxes must still be paid by April 18. If you don’t owe taxes, there’s no penalty; the IRS simply holds your refund longer.

While the IRS doesn’t penalize you for not filing a return, it does impose penalties for not paying your owed taxes on time. Late payment penalties begin at 0.5% per month, with a maximum cap of 25% of the amount due. If you fail to file for an extension, the penalty increases to 5% per month, but the maximum remains at 25%.

Additionally, interest accumulates on the outstanding balance. The IRS calculates the interest rate using the federal short-term rate plus 3%, which for this year is set at 7%.

To request a tax filing extension, you’ll need to complete IRS Form 4868. This form allows for an automatic six-month extension on your taxes if you’re filing a Form 1040, 1040NR, or 1040NR-EZ. It’s important to note that some people mistakenly file for an extension because they can’t make the tax payment, which can result in penalties and interest charges. However, if you owe taxes but can’t pay the full amount upfront, the IRS provides various payment plans to help reduce penalties and interest.

Here are some scenarios in which filing a tax extension is appropriate:

1. You are due a tax refund but can’t complete your taxes on time.
2. You can pay the estimated amount you owe but require more time to file your return.
3. You are facing a life event, such as a family death or divorce, and need additional time to gather the necessary documents for your return.
4. You simply ran out of time to file because of other commitments during tax season.

Filing an extension in these situations can help you avoid unnecessary penalties and interest while giving you the time you need to fulfill your tax obligations accurately.