If you filed a tax extension for extra time in your 2022 return, the deadline is quick approaching.
The federal tax-extension deadline on Oct. 16 is the final probability to keep away from a late filing penalty, in accordance to the IRS. However, some filers in disaster areas could have extra time.
“The neatest thing you can do to meet the extension deadline is to get organized,” stated licensed monetary planner Chris Cybulski of Chisholm Trail Financial Group in Austin, Texas. “Highlighters, sticky labels and manila folders are your pals.”
“There is nothing worse than having an incomplete mess with solely days to file,” he added.
Here are three things to know if you still haven’t filed your 2022 return, in accordance to monetary specialists.
1. Know the IRS late penalties
If you skip the deadline, you might see two IRS penalties, in accordance to Kassi Fetters, a CFP and proprietor of Artica Financial Services in Anchorage, Alaska.
The failure-to-file penalty is 5% of unpaid taxes for every month or a part of month till submitting, capped at 25%, she stated. By comparability, the failure-to-pay fee is 0.5% per thirty days or partial month. Both embrace interest.
2. You could also be eligible for IRS Free File
Roughly 70% of taxpayers qualify for IRS Free File however solely 2% used it in the course of the 2022 submitting season, in accordance to the National Taxpayer Advocate.
You could also be eligible with a 2022 adjusted gross revenue of $73,000 or much less — however Free File is solely obtainable by Oct. 16 at 12 midnight ET, in accordance to the IRS.
It’s choice for many who have easy returns, do not want ongoing tax-planning recommendation and may benefit financially from the free service.
Judy Brown
Principal at SC&H Group
“It’s choice for many who have easy returns, do not want ongoing tax-planning recommendation and may benefit financially from the free service,” CFP Judy Brown at SC&H Group within the Washington and Baltimore space, beforehand advised CNBC. She is additionally an authorized public accountant.
3. You can still fund SEP particular person retirement accounts
There are restricted alternatives left to rating a 2022 tax deduction earlier than submitting, stated Houston-based CFP Scott Bishop, managing director of Presidio Wealth Partners. He is additionally an authorized public accountant.
But self-employed, contract or gig financial system staff can still contribute to a simplified worker pension, or SEP, particular person retirement account, he stated. “That might assist your retirement plan and provides you a pleasant deduction.”
You can set up a SEP IRA as late as your corporation’ revenue tax return deadline, together with extensions, in accordance to the IRS.
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