Welcome to the first full week of April, the month that tends to bring out conflicted feelings in most of us.
While most of us are delighted that we can put away our winter coats and enjoy the arrival of spring flowers, April's arrival also means that millions of us still must confront our annual tax filing tasks.
If you've yet to file your 2022 return, here are six tax tasks to consider as the April 18 filing deadline nears.
1. Deal with your 2022 return. Tax Day is just 15 days away, and the Internal Revenue Service is waiting on literally millions of returns. If you're among these late filers, there's no reason to panic. You still have time.
But you need to decide what you're going to do soon.
If you started filling out your Form 1040 and then set it aside, give that earlier tax work another look. If you haven't started the filing process at all, but plan to file yourself, get started. Or, if it's just too overwhelming, file for an extension.
The IRS would much rather get your Form 4868 by the April 18 deadline than deal with an error-ridden return you submitted in a last-minute filing frenzy. So ask for six more months and file your accurate tax return by Oct. 16.
2. Pay, or make arrangements to, any 2022 tax you owe. While an extension will give you more time to file, you still must pay any tax you owe by Tax Day. Form 4868 is an extension to file, not an extension to pay, as it points out on line 7's "Amount you're paying" notation.
Ideally, that's the full amount you owe for the 2022 tax year. But if you can't afford that, Form 4868's instructions advise "you should pay as much as you can" with your extension filing. That will limit the amount of penalty and interest you'll owe.
And if your tax bill is ginormous, contact the IRS now about paying it off over time. The tax agency has several payment plan options.
Installment payments will cost you a little more in interest and, in some cases, application fees. But it's a small price to pay to keep the IRS from coming after you for tax evasion.
3. Make your first 2022 estimated tax payment. I know, estimated taxes are a major pain in the backside. But if you don't make them on income that's not subject to withholding and then end up owing the next filing season, you could face underpayment penalties and interest charges.
If you're self-employed, either full-time or via occasional gig work, you need to make estimated tax payments. The same is true if you get investment earnings or hit a lottery jackpot or other gambling payout.
So as you're working on your 2022 taxes, make sure you run your expected 2023 tax year numbers, too. Then make the first of these four extra tax payments for the current tax year on April 18.
Yep, estimated tax for the first quarter of the year is due on the same April day as your tax filing deadline for the previous tax year. Conveniently annoying.
And sorry, there's no extension for estimated taxes.
4. Double check your filing deadline. Some taxpayers don't have to file by April 18. However, the reason they get more time is not one any of us want. They went through a major natural disaster. When these are declared by the White House and Federal Emergency Management Agency (FEMA), the IRS follows by offering tax relief to affected individual and business taxpayers.
Certain Arkansas residents are the most recent additions to the storm-prompted extended deadline list. The IRS announced today that Arkansas victims of the March 31 severe storms and tornadoes now have until July 31 to file various federal tax returns and make payments. This includes not only their 2022 returns, but also the first estimated tax payment for 2023.
Affected taxpayers, per FEMA designation DR-4698-AR, are individuals and households that live or have a business in Cross, Lonoke, and Pulaski counties.
Other major disaster victims who have later tax deadlines this year are —
- May 15 is new tax deadline for NY severe storm victims,
- Mississippi tornado victims get July 31 tax deadline, and
- Oct. 16 is new tax deadline for residents in California, Alabama & Georgia disaster areas.
5. File your state taxes, too. Most Americans also must file some type of state (and possibly local) tax return. And in most states, that filing is closely connected to taxpayers' federal filing data. That's why most of these income-tax collecting states follow IRS' federal filing schedule, meaning they also must be submitted by April 18.
If a tax professional handles your return, that tax preparer will take care of your state/local filing. The same is true if you use tax software, either a product you buy or access online or by using this year's Free File options.
If for some reason you don't file your state return at the same time you do your federal taxes, you still might be able to do so at no cost. Most of the states that require their residents to file returns offer their own free online tax filing options
Check with your with your state's tax office to confirm its deadline for regular tax return filing. If you're in a federal disaster area, make sure your state also is giving you more time a la the IRS delay to file state returns, too.
And if you need more time, also confirm your state's filing extension requirements. In some cases, you don't have to do anything as long as you file for a federal extension. Others state tax collectors, though, could require you at least give them notice that you'll be sending in the forms a bit late.
6. File your 2019 tax return. You read that date right. If you didn't file your 2019 tax return back in 2020 and were due a refund back then, Tax Day 2023 is the last chance you'll get to collect that money. After three years, Uncle Sam gets to keep your old refund.
CORRECTION, April 12, 2023: My bad. How could I forget the first crazy coronavirus tax season back in 2020? That year, Tax Day was pushed to July 15 as the IRS joined other government agencies and private sector companies in coping with the outbreak. That means the three-year time frame started on that mid-summer date, not on the usual April Tax Day. And, as noted in this post about unclaimed 2019 tax year refunds, that means the deadline for claiming refunds overlooked in 2020 is July 17, 2023, not April 18. However, you don't have to wait until the absolutely final due date to file your old return.
Millions of folks every year somehow overlook filing even when they're due a refund. IRS is happy to send an unclaimed refund to you, but you've got to ask. And if you don't ask within three years of the old return's filing deadline, then Uncle Sam gets to keep your unsent refund. All of it. Forever.
The IRS has yet to release the data on just how much money it's holding until April 18, 2023, for 2019 tax year nonfilers. When it does, I'll blog about it and include the link here. I expect the amounts that Treasury is holding to be along the same line as the billions that were unclaimed last year.
More April tax moves: These six April tax tasks focus on finishing up 2022 tax returns. That's because that's the biggest concern right now of filing procrastinators, as well as IRS staff that must process them.
But if you've already filed, or are in good shape to meet the April 18 deadline, you can find some additional April Tax Moves in the ol' blog's right column. As is the custom, these monthly pieces of tax advice are listed under the countdown clock that's keeping track of the countdown to Tax Day 2023.
Yes, there are plenty that focus on April 18. But there are some general tax tidbits, as well as tax actions to take once you've filed your returns. Wherever you are on the tax filing season spectrum, thanks for taking a few minutes to peruse them.
If you're still working on your 1040, hang in there. We're almost done! In addition to the April tasks, you might want to also check out the ol' blog's January, February, March, and ongoing April tax tips.
And if you've met your annual filing obligation, please accept my envy-infused congratulations.