TAXING TIMES Tax Day deadline 2022 – April deadline passes as filing extension moved to October – how to avoid IRS penalty
- Our Voice by Mupenda
- Apr 22, 2022
- 4 min read
When the IRS will accept your tax return in 2022 explainedWhen you’ll get your IRS tax refund in 2022 and how to track it explained
AMERICANS who haven't completed their taxes by the April 18 deadline could have until October to file their taxes if they filed for an extension.
Unfortunately, you must have requested the extension by the April 18 deadline, or you'll receive a failure to file penalty.
If you missed the deadline, you will receive a letter from the IRS that you owe the failure to file penalty.
The penalty amount is calculated based on how late you filed your taxes, and the amount of unpaid tax, according to the IRS. The IRS will charge interest on the amount you owe until it is paid in full. Those who properly applied for the extension filled out Form 4868. This one-page form asked for general information like name, address, Social Security number, and an estimate of how much you owe in taxes. You could have also accessed the form through IRS' Free File service regardless of income. The IRS claims this year's average tax refund is over $3,200. Read our Tax Day 2022 live blog for the latest news and updates...
When were taxes due?
Taxes needed to be filed by most Americans by Monday, April 18.
That deadline has now passed.
Unemployed may have trouble with taxes, continued
If you come up with a payment plan with the IRS, you must adhere to it.
Missing a payment could lead to default and being responsible for the balance or having your wages garnished.
Another important thing to keep in mind when deciding how much you pay upfront is that you will be assessed interest by the IRS on the total amount of taxes that are outstanding.
It’s best to have the
in the first place or to pay as much as possible upfront.
Unemployed may have trouble with tax bill
If you find yourself in a position where you received unemployment last year and you cannot pay your tax bill in full by the April 18 filing deadline, don’t panic.
Unemployment expert Andrew Stettner at progressive think tank The Century Foundation told CNBC about 60 percent of Americans who claimed unemployment last year did not pay taxes on that money upfront.
Tax experts recommend paying whatever lump sum you are able to in federal and state taxes as soon as possible.
Then, contact the IRS and come up with an installment plan to pay off the balance owed over a negotiated period of time.
Unemployed may owe money, continued
Expanded unemployment benefits ended on Labor Day last year and unemployment was considered taxable income when Americans filed this year and must be accounted for.
People who collected either standard or enhanced unemployment in 2021 had the choice to have federal taxes withheld upfront from their weekly benefits, or to collect benefits in full and pay later.
However, those choosing the latter now have to pay eligible taxes on any unemployment benefits collected during the year, with no waiver on a certain amount like last year.
Plus, if you subsequently started working, the amount you earned in unemployment is added to what you made through to the end of 2021.
Unemployed may owe money
Americans who collected unemployment anytime during 2021 may find themselves owing the IRS money instead of collecting a refund this year.
Unlike in 2020, there is no tax break for unemployment benefits received last year.
The American Rescue Plan was signed into law by the Biden administration in March of 2021 to provide a lifeline to millions of American families during the pandemic, and part of the bill waived taxes on up to $10,200 received in unemployment for those making less than $150,000 in 2020.
But that waiver is not in place for this tax year.
Creating an online IRS account is helpful, continued
The moment you create your account, according to CNET, there are a plethora of actions you can take regarding your tax information, including:
Your adjusted gross income
Details of your latest tax return
Payment history for past five years
Amount of taxes currently owed
Economic impact payment amounts
Advance child tax credit payment amounts
Digital versions of some IRS notices
Tax professional authorizations
Creating an online IRS account is helpful
According to CNET, creating and owning an IRS account is important because it can help you organize and gather any data you may need to file your return.
The biggest reason to create an online account, according to the website, is that it allows you to find data quickly.
With an IRS online account, you may make payments, go paperless for some IRS notices, and approve authorization requests from your tax expert in addition to accessing your personal tax information.
Instant copies of tax documents, such as transcripts of previous tax returns and pay and income statements, are available.
You may also get an Identity Protection PIN through your online account to provide an extra degree of security to your tax data, the website reports.
Important to check for errors on return
Selecting the incorrect filing status, entering the incorrect Social Security number, and underreporting income are all typical blunders on tax returns, the IRS says.
The agency has reported that people are neglecting to declare their jobless income in some situations.
If you must file a paper return, double-check that it is being sent to the right address.
Repayment protection, continued
You will not qualify for any repayment protection if your modified AGI is at or above the amounts listed below, based on the filing status on your 2021 tax return.
$120,000 if you are married and filing a joint return or if filing as a qualifying widow or widower
$100,000 if you are filing as head of household
$80,000 if you are a single filer or are married and filing a separate return
*Source:The Sun
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