THE TAX-FILING DEADLINE IS DRAWING NEARBack to all blogs
- Balance-Due Payments
- Contributions to Roth or Traditional IRAs
- Individual Refund Claims for the 2018 Tax Year
- Missing Information
Caution should be exercised when preparing the 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 2021 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a timely manner; at this office, we can file your extension electronically before the due date and have any amount owed withdrawn from your bank account. Because the IRS is so backed up opening mail, 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 18 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 18 deadline also applies to the following:
- Balance-Due Payments for the 2021 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 2021 Tax Year – April 18, 2022, is the last day for 2021 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 2022 – The first installment of the 2022 estimated tax payment is due on April 18, 2022. If you make estimated tax payments and did not file the first installment on or before April 18, 2022, then that payment is late, and you should file it as soon as possible to mitigate any penalties.
- Individual Refund Claims for the 2018 Tax Year – The regular three-year statute of limitations expires for the 2018 tax return on April 18 of this year. Thus, no refund will be granted for a 2018 return (original or amended) that is filed after April 18, 2022. 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 2018 tax year if they do not file before the statute of limitations ends. Caution: The statute does not apply to balances due for unfiled 2018 returns.
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.