The last day to file your taxes (no extension), April 15 of this year, is still a couple of months away. But if you’re thinking about filing a free tax extension, there’s money on the table that the IRS owes you that could delay.
In addition to completing your tax return, the best tax software It can also help you file a tax extension, but you can also mail IRS Form 4868 as long as it is postmarked by the deadline.
We’ll tell you how to file a tax extension, as well as any money you could delay if you do. For more information, here’s how file your taxes for free and track your IRS tax refund after submitting the application.
How to file a tax extension
If you plan to file a tax extension this year, you will need to submit Form 4868 (PDF) to the IRS, either on paper or electronically via e-file, by the April 15 deadline. As long as your electronic extension is sent before midnight, or your letter is postmarked by that date, your extension should be valid.
However, if you believe you owe taxes, you will need to pay your estimated income tax due through Direct Payment, the Electronic Federal Tax Payment System, or by debit card or credit card. If you don’t pay your estimated taxes with your extension and you owe money, you’ll have to pay interest on that money, as well as a possible penalty when you file.
Some taxpayers are automatically given more time to file. This includes military personnel serving in a combat zone or people in federally declared disaster areas. U.S. citizens living outside the country have until June 17 to apply.
Will an extension delay the taxes you owe to the IRS?
No. Extending your filing deadline does not delay the time you have to pay any taxes you may owe. According to the IRS, you should estimate and pay at least 90% of your tax liability by the due date to avoid late payment fees. Otherwise, you will have accumulated interest on what you owe, which you will eventually have to pay (plus possible penalties) in addition to your income taxes.
The late payment penalty is usually 0.5% per month of the outstanding tax not paid by the filing deadline, with a maximum of 25%. The IRS may also impose a late filing penalty of 5% of the amount owed for each month or partial month in which your tax return is late. If your return is filed more than 60 days after the due date, the minimum late filing penalty is $450 or 100% of the unpaid tax (whichever is less).
For individual taxpayers, penalties and interest will stop accruing only when your balance is paid in full. For more information about penalties or to work out a payment plan with the IRS, see their website.
How does child tax credit money relate to 2023 tax returns?
If you had a new baby or gained a dependent at any time in 2023 that the IRS didn’t know about, you could get even more money back. Or if your income changed and you didn’t update those details in the IRS Update Portal, you may be eligible to receive more money.
If you don’t file your taxes by the deadline, you could lose up to $2,000 per child.
Are child care expenses included in tax refunds this year?
The child care tax credit remains the same as its 2019 levels. The amount of money you can recover for expenses you paid for child or dependent care has decreased significantly from the pre-pandemic amount. But a refund is still a refund! You could receive up to $1,050 for one child or up to $2,100 for two or more children, according to TurboTax.
Here’s what counts as an expense: daycare, babysitters, transportation to and from care providers, day camps, and before- and after-school programs. The amount of money you are eligible to receive a refund for will be sent with your tax refund.
Will your tax refund be delayed if you file an extension?
Yes. The timeline for getting your income tax refund depends on when you file it. And although you have until October 15 to file if you file an extension, that doesn’t mean you have to wait that long to file.
Some refunds, especially for more complicated returns or those that need corrections, could take months to arrive.
The IRS is asking taxpayers to file their returns electronically this year and carefully review their data before filing to avoid errors that could delay your refund. The agency also asks that you register for direct deposit to get your money faster.
Ways to file your 2023 tax return
The IRS says taxpayers can file and schedule their federal tax payments online, by phone or with the IRS2Go mobile app.
If you need to find a tax software service to use and you make $79,000 or less, you can easily find a free IRS-approved filing service. You will need to collect the following information: income statements (W2 or 1099); any adjustments to your income; your current marital status (single, married, joint filer); and dependent information. If you earn more than $79,000, you can use the Free File fillable form.
If you haven’t made a tax payment yet, the IRS prefers payments to be made electronically and offers a variety of ways to do so, including IRS Direct Payment, which is directly linked to a checking or savings account. Another option is by credit card through the IRS2Go mobile application, or through the Electronic Federal Tax Payment System.
How to Check Your IRS Tax Account Online
An easy way to review all of your tax-related details, including your address and payment plan details, is to access your IRS account online. According to the IRS, taxpayers can use their account information if they need to access their adjusted gross income, find their stimulus payment and child tax credit amounts, or review their estimated tax payments or credits. Accessing your tax transcript will give you all the records you need if you have a tax problem or a missing payment.
If you have any additional questions, you can visit the IRS Interactive Tax Assistant for help.
For more tax information, here’s why you might want register for direct deposit when you file your taxes.