This year, nearly 19 million Americans asked for a tax extension. Or nearly 1 in 8 Americans had to ask for additional time.
A Struggling Year
Several reasons explain the difficulties encountered by taxpayers this year. Excluding procrastination, post-Covid challenges, inflation, tax law changes, the IRS backlog, and taxpayers exhaustion were all major obstacles preventing tax filing on time. With prior tax filing years adjusted, respectively, to July 15 in 2020 and May 17 in 2021, the return to the traditional April deadline triggered stress and delays in planning for tax season.
Tax preparers themselves have struggled to meet tax deadlines due to tax law changes and newer exemptions or credits. Certain forms were not received on time by taxpayers and missing tax information prevented these professionals from filing on time, therefore submitting IRS Form 4868 for the extension was the unique solution. Business owners have also had to prepare properly and needed extra time to calculate their Covid-related Employee Retention Tax Credit which could impact largely their tax returns.
Avoid Penalties and Interests
Yet, October 17th and the tax extension deadline for most taxpayers is fast approaching. And if you are a business, the last day to file is today. After few months of extension, taxpayers now have to file their individual income tax return within a month. The sooner the better. Especially since tax penalties continue to accrue this year, unlike 2019 and 2020 tax returns, while reaching up to 25% of unpaid taxes.
US Tax Shield Advices
- According to the IRS, e-filing and choosing direct deposit help getting refunds faster.
- Keep any documents you received from your employer or any other entities. With the complexity of tax laws, keeping all records will ensure proper tax filing. With Covid related payments such as stimulus, exemptions or child tax credits, delays in processing and getting refunds occur due to tax filing mistakes.
- Pay if you can. The sooner you pay, the less you will owe penalties and interest. For the third quarter of 2022, the interest rate is 5%. It jumps to 6% on Oct. 1.
If any additional help is needed, you can contact us anytime and we will take care of your tax filing immediately. Our decades of expertise allows us to file accurately and efficiently, based on the latest tax laws and possible advantages.
