The Who, What and When of Filing Taxes
For those who live and work in the United States, the month of April brings not only longer days and excitement for spring, but a looming tax filing deadline. Every April, citizens and residents of the United States must inform the Internal Revenue Service (the department that oversees and enforces US tax laws) about how much income they generated last year.
Because many businesses automatically deduct taxes, when you file, it will be determined if you overpaid or underpaid your taxes for the year. If you underpaid, you’ll be required to send the money that you owe to the IRS to avoid a penalty.
But if you overpaid, tax season looks a little more exciting. That overpayment will come back to you in a lump sum via check or direct deposit, giving you an unanticipated boost in your budget and allowing you to pay off debt, add to your savings, or do some investing.
Here are the basic things to know about tax season.
Taxes due: April 18, 2023
Who needs to file: All U.S. citizens and permanent residents. The base level of income varies based on your age and filing status: single people under 65 must file if they make more than $12,950 or $14,700 if they are over 65. Couples filing jointly must file if they made more than $25,100 a year.
Non-residents who do not qualify for a Social Security number but who still earn money are also required to pay taxes on any income earned in the U.S. Non-residents will need form 1040-NR (the U.S. Nonresident Alien income Tax Return) and will need to have an ITIN (individual taxpayer identification number) in order to process their returns.
Tax extension deadline: October 16, 2023
Who qualifies for an extension: Whether you are missing documents, have endured a life change that impacts your finances or simply need more time to file, anyone can apply for extra time to complete their taxes. The process is fairly simple, and as long as you file for an extension by the tax deadline, you’ll be approved. Fill out form 4868 through the IRS to file for an extension.
Why: It’s the law — and failure to do so can result in hefty penalties. The Failure to File penalty charges 5 percent of the unpaid taxes for each month the payment is late. If you file and owe money, but don’t pay, the IRS’s Failure to Pay penalty is .5 percent of the unpaid amount every month that it is late. (In both situations, the maximum penalty won’t exceed 25 percent of income.)
How to file: Tax software such as TurboTax, H&R Block, TaxSlayer and Jackson Hewitt Online make it easy to send your taxes in. Have your tax forms from your employer handy, and simply fill in the designated forms with your personal information and your income information. Most software allows you to submit your forms to the IRS electronically — and the faster you file, the faster you get that return back. If you feel more comfortable, printing and mailing is also an option. Printing is also an option, if you feel more comfortable doing that.
When to expect your return: Taxpayers who file electronically can expect their tax return back as quickly as to 21 days — provided there are no errors. The fastest way to get your return is by filing electronically and opting for direct deposit. If you file on paper and request a check, expect from six to eight weeks for that check to arrive in the mail.
