The IRS is processing tax returns and tax refunds are on the way. Most Americans will see refunds in the coming weeks, but what happens if you wait until the last day to file? What happens if you request a tax extension from the IRS?
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When are taxes due in 2022?
For most Americans income tax returns are due on Monday, April 18. The IRS has already processed millions of returns for 2021, which means that tax refunds are on the way.
However, waiting until the deadline could mean that those owed a refund are forced to wait longer. In 2021, tax returns were delayed by months- as some American continue waiting to have last year’s tax nightmare resolved.
A variety of factors made tax returns from the last two years complex. Stimulus payments, regulatory changes induced by the coronavirus pandemic, as well as child tax credits that were expanded and enhanced.
Typically, April 15 is Tax Day, but due to a holiday in Washington, D.C. the real thing comes on April 18. For taxpayers in Maine and Massachusetts Tax Day is April 19. Those who dealt with weather-related disasters in Tennessee, Illinois, and Kentucky have an extra month. Tax Day deadline has been extended there to May 16.
What happens if you file an extension?
Americans will have to request an extension by April 18 or 19 depending on state of residence. Once granted by the IRS, taxpayers will have until October 17, 2022 to file their complete 2021 tax return.
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When will refunds arrive? Does filing early help?
The IRS says that refunds can be expected within 3-4 weeks of filing. While there are exceptions to this, many Americans have reported a positive experience in 2022. The IRS dealt with manpower issues in 2021, which created an historic backlog of outstanding refunds.
Filing taxes sooner-than-later can be beneficial. Experts say it comes down volume that the IRS sees. Many Americans wait until closer to the deadline to file income tax returns, so filing early means you beat the rush.
However, it’s not a guarantee because the IRS is still dealing with staff shortages. Like last year, those who are receiving payments by direct deposit are expected to see refunds fastest.
What happens if you file income taxes late?
If you’re owed a refund- filing taxes late doesn’t come with any penalty. If you owe money- then filing late will come with penalties. The late-filing penalty is 5% and can increase significantly to 25% of your balance due, if not handled quickly.
Want more information? Check out the IRS FAQ page here
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