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It’s the Final Countdown for Extended Freelance Tax Returns Don’t Miss It the October 17 Deadline!

By September 25, 2022December 31st, 2022No Comments

Did you run short of time last April when the regular tax filing deadline came? Hopefully, it was a rare occurrence and you took the smart step of filing an extension for your 2021 taxes. If so, the six-month window to get your taxes filed without additional failure to file and late payment penalties is rapidly closing. It will slam shut on October 17, 2022, so if you haven’t already, now is the time to make good on your commitment to filing by this date. Doing so will take it off your to-do list and reduce your tax penalty burden if you already have one to contend with.

 

Many taxpayers, you included, misunderstand what an extension on their taxes really means, so here are the facts:

 

  • An extension is simply an agreement between you and the IRS that as long as you file on or before the 6-month mark after the original deadline, you will not be subject to failure-to-file penalties. However, it is not an extension on the tax payment you owed in April the original filing deadline. Bottomline: Your 2021 tax liability was due, in full, on April 18, 2022 when you submitted IRS Form 4868 to extend your tax return.

 

What happens if you didn’t file an extension and you didn’t pay by April 18, 2022?

 

  • If you didn’t file an extension and you didn’t make a payment with your extension or you paid after April 18,2022, the IRS may assess a late-filing penalty of 5% per month of the tax owed and a late-payment penalty of 0.5% a month of the tax due. The maximum late filing penalty is 25% and the late-payment penalty maximum is 25%.

 

 

What happens if you did file an extension by April 18. 2022, but you didn’t pay?

 

  • If you didn’t pay or you paid late, the IRS may assess a late-payment penalty of 0.5% a month of the tax due. The maximum late-payment penalty maximum is 25%.

If you are missing information or need updated or corrected forms in order to file your taxes, these tips from the IRS can also help you take care of them so you can get your taxes filed by the October 17, 2022 extension deadline:

  • If you haven’t received a W-2 or Form 1099, be sure to contact your employer, payer or issuing agency and request the missing documents. This also applies for those who received an incorrect W-2 or Form 1099.
  • If you haven’t already received the forms, you must still file your tax return by the extended due date of October 17, 2022 assuming you filed for an extension.
  • If you do not receive the missing or corrected form in time to file your tax return, you can estimate the wages or payments made to you as well as any taxes withheld.
  • If you receive the missing or corrected Form W-2 or Form 1099-R after filing your return and the information differs from your previous estimate, you must file Form 1040-X, Amended U.S. Individual Income Tax Return.
  • If you receive an incorrect Form 1099-G for unemployment benefits, you should contact the issuing state agency to request a revised Form 1099-G.

Another potentially missing or incorrect piece of information may be related to advance child tax credit or economic impact payments. You must have the total amounts of advance child tax credit payments and the amount of your third Economic Impact Payment to claim a recovery rebate credit and remaining child tax credit on return.

This information will be available in your online account or if you received these documents: Letter 6419, 2021 Total Advance Child Tax Credit Payments, and Letter 6475, 2021 Economic Impact Payment. This will help you file an accurate return. If you have lost or misplaced these letters, you can check your online account.

Married spouses who received joint payments will need to log into their own online account or review their own letter for their portion of the total payment. If filing a 2021 return as married filing jointly, you should add the payments together to provide the total amount.

While there are many different reasons why you may not have been able to file your your taxes on time, it is critical to meet the extension deadline, otherwise you will be faced with additional penalties.

 

Refund claim depends on your tax situation, generally, claim must be filed within 3 years from the time the return was filed or two years from the time the tax was paid, whichever of such periods expires the later, or if no return was filed by the taxpayer, within 2 years from the time the tax was paid. If you have no refund due, you have more than three years to file an amended tax return, Form 1040X, however, you will be subject to interest and penalties on the outstanding balance.

 

October 17 is just a few weeks away, do not delay getting your extended taxes filed now. The time you spend today taking care of this will allow you to reduce your ultimate time, financial, and stress related to taxes so you can focus on finishing 2022 strong in your business and file 2022 taxes in the clear of any additional penalties or previous tax issues.