The IRS has reminded individuals about the upcoming tax filing extension deadline. To avoid a late filing penalty, those individuals who requested an extension to file their 2023 tax return should file their Form 1040 on or before October 15, 2024.
Those individuals with an address of record in other areas covered by the Federal Emergency Management Agency (FEMA)declaration may have additional time to file. They include the following states/counties and territories:
Members of the military and others serving in a combat zone typically have 180 days after they leave the combat zone to file returns and pay any taxes due.
At the time this column was written, Hurricane Helene resulted in over 100 deaths, floods, destruction to homes and businesses. The IRS will undoubtedly allow extensions to file 2023 federal income tax returns to residents living in areas of the affected states which include Florida, Georgia, Alabama, South Carolina, Tennessee, Ohio and Virgina.
Filing Taxes for Free
Some individuals have an option to file their taxes online for free. It is called the IRS Free File. IRS Free File allows qualified individuals prepare and file federal income tax returns online using guided tax preparation software. It is safe, easy and there is no cost. Those individuals who do not qualify because their adjusted gross income exceed $79,000 during 2023, can still use Free File Fillable Forms.
The following choices are available form IRS Free File: Guided Tax Software – for individuals with adjusted gross income less than $79,000 during 2023:
• Answer simple questions.
• Accurate math calculations guaranteed, and
• Free state income tax preparation and filing.
Schedule and Pay Taxes Electronically
Even if an individual is not eligible for IRS Free File because during 2023 their AGI exceeded $79,000, they are advised to file and schedule their federal tax payments up to the October 15,2024 filing deadline. They can pay online, by phone, or with their mobile device and the IRS2Go applicant. Some other key points to keep in mind when filing federal taxes electronically:
• Convenience. Electronic payments online are easy and flexible. Individuals can pay when they file electronically using tax software. Those individuals who use a tax preparer should ask the preparer to make the tax payment through an electronic fund withdrawal.
• IRS Direct Pay. This feature allows individuals to pay online directly from a checking or a savings account for free and schedule payments up to 365 days in advance. An IRS Online Account is needed in order to use IRS Direct Pay.
• Pay by card. Payments can be made with a credit card, debit card or a digital wallet option. These are available through a payment processor. The payment processor, not the IRS, charges a fee for this service.
• IRS2Go. The IRS2Go mobile app provides access to mobile-friendly payment options including Direct Pay and debit or credit card payments.
• Electronic Federal Tax Payment System (EFTPS). EFTPS allows for payments online or by phone using the EFTPS Voice Response System. EFTPS payments must be scheduled by 8:00 pm Eastern Time at least one calendar day before the tax due date.
When filing a 2023 federal return that has an extension, if there is a refund due, then the refund will be deposited into the designated bank account within a few weeks of the return being accepted by the IRS. If there is a balance due, a late payment penalty will be imposed, and interest charges will be added to the balance due. The IRS will bill the individual separately for the late payment penalty and the interest charges.
Those individuals who do not have sufficient funds to pay the balance due are advised to still file their 2023 return and pay whatever they can. The IRS will then charge the individual for whatever remains of the balance due, together with the late payment penalty and interest charges.
Individuals who live in states with income taxes also have a deadline of October 15, 2024 to file their 2023 state income tax returns. The states impose the same type of penalties for date filing and charge interest on the amount of the balance due.