Have you filed your 2021 tax return? Considering requesting an extension? The April 18 tax deadline is fast approaching.

The IRS has already sent out almost 50 million tax refunds so far this year to those that have submitted their 2021 returns, but with less than a month to go until the April 18 tax deadline, you may be thinking of filing a tax extension.

Seeking an extension

Although an extension gives you more time to file your return, it doesn’t postpone having to pay the taxes that you owe. The IRS states that you need to estimate and pay at least 90% of your tax liability by the deadline to avoid late fees. Otherwise you will accrue interest on what you owe, which you’ll have to pay at some point – plus penalties.

The penalty is normally 0.5% per month of the outstanding tax owed by the filing deadline, up to a maximum of 25%. The IRS can also issue a late-filing penalty of 5% of the amount due for every month or partial month your tax return is late. If your return is filed more than 60 days after the due date, the minimum later-filing penalty is either $435 of 100% of the unpaid tax, whichever is less.

If you do delay this year, you could be delaying thousands of dollars owed to you.

More money could be tied to your refund that you realize. You could be entitled to:

• Child tax credit money
• Reimbursement for child care expenses
• Stimulus check money

Will my refund be late if I file an extension?

The likelihood is that it will take longer than the average 21 days to issue a refund because the timeline for getting your income tax refund depends on when you file.

The IRS is still experiencing delays due to the pandemic, and has a backlog of unprocessed returns.

Although you have until October 15 to submit your return if you do decide to file an extension, it doesn’t mean you have to wait that long to file.

How we can help

If you need help to file your return on time, or are considering requesting an extension, contact us today for a free initial consultation. TaxAssist offers an expert professional advisory service. Inquire online here to book your free, no obligation consultation.

Date published Mar 25, 2022 | Last updated Jul 22, 2022

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.