The Tax-Filing Deadline Is Drawing Near

Article Highlights:

• Extensions
• Balance-Due Payments
• Contributions to Roth or Traditional IRAs
• Individual Refund Claims for the 2020 Tax Year
• Missing Information

As a reminder to those who have not yet filed their 2023 tax returns, April 15, 2024, is the due date to either file a return (and pay the taxes owed) or file for an automatic extension (and pay an estimate of the taxes owed). Taxpayers in Maine and Massachusetts get additional time to the 17th.

Caution should be exercised when preparing an extension application, which is IRS Form 4868. Even though this form is described as "automatic," the extension is automatically granted only if it includes a reasonable estimate of the 2023 tax liability and only if that anticipated liability is paid along with the extension application. It is not uncommon for taxpayers to enter zero as the estimated tax liability without figuring the actual estimated amount. These taxpayers risk the IRS classifying their forms as having been improperly completed, which in turn makes the extensions invalid. If you need an extension, please contact this office so that we can prepare a valid extension for you.

The extension must be filed in a timely manner; at this office, we can file your extension electronically before the due date and have any amount owed withdrawn from your bank account. We do not recommend the payment be made by mail. But if you do decide on mailing an extension, be advised that the envelope with the extension form must be postmarked on or before the April due date. However, there are inherent risks associated with dropping an extension form in a mailbox; for instance, the envelope might not be postmarked in a timely fashion. Thus, those who have estimated tax due should mail their extension forms using registered or certified mail so as not to risk late-filing penalties.

In addition, the April deadline also applies to the following:

• Balance-Due Payments for the 2023 Tax Year - Be aware that Form 4868 is an extension to file, NOT an extension to pay. The IRS will assess late-payment penalties (with interest) on any balance due, even when the extension has been granted. Taxpayers who anticipate having a balance due need to estimate this amount and include payment for that balance, either along with the extension request (as indicated above) or electronically by this firm or through the IRS website.
• Contributions to a Roth or Traditional IRA for the 2023 Tax Year - April 15, 2024, is the last day for 2023 contributions to either a Roth or a traditional IRA. Form 4868 does not provide an extension for making IRA contributions.
• Individual Estimated Tax Payments for the First Quarter of 2024 - The first installment of the 2024 estimated tax payment is due on April 15, 2024. If you make estimated tax payments and did not file the first installment on or before April 15, 2024, then that payment is late, and you should file it as soon as possible to mitigate any penalties.
• Individual Refund Claims for the 2020 Tax Year- The regular three-year statute of limitations expires for the 2020 tax return on April 15 of this year. Thus, no refund will be granted for a 2020 return (original or amended) that is filed after April 15, 2024. Taxpayers could risk missing out on the refundable Earned Income Tax Credit, the refundable American Opportunity Tax Credit for college tuition, and the refundable child credit for the 2020 tax year if they do not file before the statute of limitations ends. Caution: The statute does not apply to balances due for unfiled 2020 returns.

Special rule for 2020 returns originally filed after April 15, 2021 but before May 17, 2021: Due to the Covid-19 pandemic, the IRS postponed the due date of 2020 returns for individual taxpayers until May 17, 2021. So, for individual taxpayers whose 2020 tax returns were filed with the IRS after April 15, 2021, but before May 17, 2021, a claim for refund will need to be filed within three years from the date of filing to be timely.

If your 2023 return is still pending because of missing information, please forward that information to this office as quickly as possible so that we can ensure that your return meets the April 15 deadline. Keep in mind that the last week of tax season is very hectic, and your returns may not be completed in time if you wait until the last minute. If you know that the missing information will not be available before the April 15 deadline, then please let us know as soon as possible so that we can prepare an extension request.

If you have not yet completed your returns, please call this office right away so that we can schedule an appointment and/or file an extension for you.