Tax season is approaching its deadline, with just over three weeks left for Americans to file their taxes. The IRS has reported a slight decrease in returns processed compared to last year but an increase in the average tax refund.
With tax season reaching its peak, Americans are racing against the clock to file their returns as the April 15 deadline looms just over three weeks away. As taxpayers scramble to meet their obligations, the Internal Revenue Service (IRS) has reported notable trends in filing and processing returns for the current tax year.
According to data from Forbes, the IRS has seen a 1.7% decrease in the number of returns received this tax season compared to the previous year. Additionally, there has been a 2% reduction in returns processed compared to 2023. These figures underscore the evolving dynamics of tax compliance amidst changing economic conditions and regulatory landscapes.
Despite fluctuations in the volume of returns, there is a glimmer of positivity for taxpayers awaiting refunds. As of March 1, the average tax refund issued by the IRS stands at $3,182, reflecting a 5.1% increase compared to the corresponding period in 2023. However, caution is advised as history shows a potential decline in refund amounts between March and April, as highlighted by Barron's, which reported a 13% drop during the same period in the previous year.
For those yet to file their taxes, here are crucial deadlines to bear in mind:
Last Day to File Taxes: The deadline for the vast majority of Americans to file their tax returns with the IRS is Monday, April 15.
Extension Deadline: If unable to meet the April 15 deadline, taxpayers can request a six-month extension, with the deadline also falling on April 15.
Extension Filing Deadline: Should an extension be filed, taxpayers will have until Tuesday, October 15, 2024, to submit their returns.
Failure to adhere to these deadlines could result in penalties and interest, with the standard penalty for late filing amounting to 5% of any tax due for each month the return is overdue, capped at 25% of the unpaid balance. It's crucial to note that an extension to file does not equate to an extension to pay, as emphasized by the IRS.
Moreover, while April 15 serves as the standard tax deadline for most Americans, exceptions exist for certain regions and circumstances. For instance:
Disaster Relief Deadlines: Individuals and businesses in disaster-affected areas, such as parts of Tennessee and areas impacted by Hamas attacks in Israel, may have extended deadlines. Likewise, residents of Massachusetts and Maine enjoy a later federal tax deadline due to state holidays.
For those considering requesting an extension, the process can be initiated through the IRS, either electronically or via mail using Form 4868. Basic information including name, address, Social Security number, and estimated tax liability is required. Regardless of income, individuals can utilize IRS Free File for electronic extension requests.