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Int'l Business Times
2 days ago
- Business
- Int'l Business Times
Filing Taxes Late in the US (2025): Penalties and How to Get an Extension
Filing taxes can feel overwhelming, especially when you're worried you've missed the deadline. But the good news is, it's not too late to act. If you're still working through your 2025 tax return, take a deep breath: there's still a way forward. With the right information and the proper tools, tax filing becomes much more manageable. Whether through expert advice or accessible digital platforms, anyone can take control of their taxes. Key Tax Deadlines And How To File Late Understanding the important dates is crucial for a smooth tax season and avoiding extra charges. The IRS began accepting 2025 tax returns on 27 January, with the official deadline set for 15 April. If you've missed that window, it's vital to request an extension immediately by submitting Form 4868. You'll need to include your name, address, Social Security number or individual taxpayer identification number (ITIN), as well as an estimate of what you owe and how much you're paying. Even if you can't pay the full amount, you may still qualify for an extension. This form can be submitted via tax software, a professional preparer, or the IRS Free File service, extending your deadline to 15 October. Alternatively, you can also obtain an extension by making a payment through Direct Pay or the Electronic Federal Tax Payment System and selecting 'extension' as your payment reason. Note that this extension only covers your return, not the payment itself, which was due on 18 April. Missing the payment deadline may lead to interest and penalties. The failure-to-file penalty stands at 5% of unpaid taxes per month (up to 25%), while the failure-to-pay penalty is 0.5%, also up to 25%. While it's important to file on time, how you do it is up to you. Embracing Digital Tools To File Taxes There are several ways to file taxes, and the best one for you depends on your needs. Tax apps have grown in popularity for their ease, affordability and speed. TurboTax is a leader in the space, offering services from free basic filing to professional support packages that cost up to £286 ($389). For a more guided experience, it also provides assisted filing via live chat. H&R Block offers similar services with both free and paid options. These platforms are especially helpful for automatically identifying applicable deductions and credits, which can increase your refund. Prefer government-backed methods? Those are available too. Government-Supported Filing Options If your adjusted gross income is £53,752 ($73,000) or less, the IRS Free File programme offers Guided Tax Preparation. For higher earners, Free File Fillable Forms are available. For individuals earning £49,334 ($67,000) or less, the Volunteer Income Tax Assistance programme provides free help. Seniors aged 60 and above can also access Tax Counseling for the Elderly. For those leaning towards a more traditional method, you can still complete Form 1040 and post it to the IRS. While reliable, this method may take longer to process. What You Need To File Accurately Regardless of your filing method, preparation is essential. Start by collecting key documents: W-2s, 1099s for freelance or investment income, and any proof of deductions or credits. Then choose whether to file solo, with a professional, or through software. Accurately determining your filing status—single, married filing jointly, or head of household—is key, as it impacts your tax rate and eligibility for credits. Many opt for the standard deduction, which in 2025 was £22,090 ($30,000) for joint filers and £11,045 ($15,000) for single filers. It's vital to understand the benefits of credits like the Earned Income Tax Credit (EITC) and Child Tax Credit, which can significantly reduce your tax bill. Filing is essential even if you're unsure about your obligation—you could be eligible for a refund. How To Pay Your Taxes Efficiently The IRS offers several payment options including bank transfers, credit cards, and digital wallets. If you can't cover your full liability, request a payment plan. Be aware that interest will accrue until your balance is cleared. Apply for a plan online or by using Form 9465. To reduce interest, consider a credit card with 0% introductory interest. If you expect a refund, opt for direct deposit—electronic filings are usually processed within 21 days. Returns flagged for manual review may take longer, and if the IRS adjusts your return, they will contact you by mail. Although the official extension deadline has passed, delaying further is unwise. Whether you're filing alone, with professional help, or using digital tools, the key is preparation. Gather your documents, choose the right method, and understand your eligibility for deductions and credits. Being organised and precise will help you avoid stress and maximise your refund. Originally published on IBTimes UK
Yahoo
26-05-2025
- Business
- Yahoo
US taxpayers abroad face June 16 filing deadline: IRS
The Internal Revenue Service (IRS) has extended the deadline for US taxpayers residing abroad, including military personnel on duty outside the US, to file their 2024 federal income tax returns. The new deadline, set for June 16, considers the standard two-month extension from the usual April 15 deadline, adjusted due to June 15 being a Sunday in 2025. Eligibility for the automatic extension to file applies to those whose primary residence or business is outside the US and Puerto Rico, as well as those in military or naval service stationed abroad. Taxpayers must attach a statement to their return to indicate their eligibility. Those unable to meet the June 16 deadline can request an additional extension to October 15, 2025, using electronic options provided by the IRS or by mailing Form 4868. However, IRS said an extension to file does not equate to an extension to pay adding that interest will accrue on any tax payments for 2024 received after 15 April. Payments can be made electronically through various IRS platforms, including IRS Online Account, IRS Direct Pay, and the Electronic Federal Tax Payment System (EFTPS). For taxpayers without a US bank account, direct transfers to the IRS are possible, it added. Alternative payment methods such as debit cards, credit cards, and digital wallets are also available, although service providers may charge fees. Military members stationed abroad or in combat zones during tax season may qualify for additional extensions. Taxpayers in areas affected by attacks, such as Israel, Gaza, and the West Bank, have a filing and payment deadline of September 30, 2025. IRS sought individuals with foreign financial accounts exceeding an aggregate value of $10,000 in 2024 are required to file Form 114, Report of Foreign Bank and Financial Accounts (FBAR), with the Financial Crimes Enforcement Network (FinCEN). Last week, IRS' probationary employees, who were previously laid off by the US government and then reinstated, were reportedly asked to return to the office by 23 May. "US taxpayers abroad face June 16 filing deadline: IRS" was originally created and published by The Accountant, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
23-05-2025
- Business
- Miami Herald
IRS Issues Tax Deadline Reminder To Millions
The Internal Revenue Service (IRS) has issued a reminder to millions of U.S. taxpayers living and working abroad to file their 2024 federal income tax returns and pay any taxes due by June 16. The extension applies to U.S. citizens and resident aliens outside the country, including dual citizens, offering them a two-month grace period after the regular April 15 deadline. All U.S. taxpayers, regardless of where they live, must report worldwide income to the IRS. That includes wages, interest, dividends and income from foreign sources. Accurate and timely filing is required to avoid interest, penalties, and the risk of missing out on available tax credits such as the foreign earned income exclusion. U.S. citizens or resident aliens whose residence and main place of business or post of duty is outside the U.S. and Puerto Rico, as well as members of the military on duty abroad, qualify for the automatic two-month extension-shifting their filing deadline from April 15 to June 16, 2025. Taxpayers unable to file by June 16 can request an additional extension to October 15, 2025. This extension is limited to filing-not to payment. Interest will accrue on any unpaid taxes starting from April 15, 2025. Electronic extension requests can be submitted through IRS systems, and Form 4868 is available for those unable to file online. Businesses should use Form 7004 for extensions, and can get a six-month extension. The fastest payment options include IRS Online Account, IRS Direct Pay, and the Electronic Federal Tax Payment System (EFTPS). U.S. taxpayers without a domestic bank account can transfer payments directly to the IRS. Debit and credit cards, as well as digital wallets, are also accepted and may include service fees. Individuals affected by the ongoing conflict in Israel, or with residences or businesses in Israel, Gaza, or the West Bank, have their federal filing and payment deadline extended to September 30, 2025. Military personnel on duty in combat zones may also qualify for automatic extensions. Taxpayers with foreign financial accounts holding more than $10,000 at any point during 2024 must submit Form 114 (FBAR) electronically to the Treasury Department's Financial Crimes Enforcement Network. The initial deadline was April 15, 2025, with an automatic extension to October 15, 2025, for those who missed the first date. Jay A. Soled,professor and chair of the Department of Accounting and Information Systems at Rutgers Business School, New Jersey,previously told Newsweek: "Even with the tax-filing extension, interest will apply to any 2024 tax payments received after April 15. This means that unpaid tax-year 2024 tax balances will begin accruing interest, currently at the rate of seven percent per year, compounded daily, after April 15, 2025." Commenting on why individuals working and living abroad have a two-month filing extension, Soled said it was "undoubtedly a relic of a bygone era when it was difficult for those living overseas to receive third-party information returns." He added that "in light of current technological developments, Congress would be wise to eliminate this exception." Richard D. Pomp, professor of law at the UConn Law School, Connecticut,previously told Newsweek, while discussing why individuals working and living abroad have a two-month filing extension: "The extension is a very old rule that predates the digital economy. Correspondence in those early days took place by mail and the time it took for mail to go back and forth across the ocean could lead to delays that taxpayers living in the country did not experience. In the digital economy, things are far more efficient and the rule is probably unduly generous." He added: "We are currently living through a total state of chaos at the IRS. Whenever possible, taxpayers abroad should file electronically and verify with screen shots and saved files, and copies of all documentation. U.S. taxpayers abroad have until June 16, 2025, to file their returns and pay taxes due for 2024, with eligible individuals able to seek additional extensions or payment arrangements if they are unable to meet this deadline. Taxpayers affected by the Israel-Hamas conflict or stationed in combat zones should review specific guidance and utilize all available IRS resources for support. Related Articles Trump Admin Gets a Win as Judge Allows IRS to Share Tax Data With ICEHunter Biden Drops Lawsuit Against IRS Employees: 'Afraid to Fight'IRS Issues Advice As Natural Disaster Season ApproachesIRS Issues Guidance For Those Facing May 15 Tax Deadline 2025 NEWSWEEK DIGITAL LLC.
Newsweek
23-05-2025
- Business
- Newsweek
IRS Issues Tax Deadline Reminder To Millions
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The Internal Revenue Service (IRS) has issued a reminder to millions of U.S. taxpayers living and working abroad to file their 2024 federal income tax returns and pay any taxes due by June 16. The extension applies to U.S. citizens and resident aliens outside the country, including dual citizens, offering them a two-month grace period after the regular April 15 deadline. Why It Matters All U.S. taxpayers, regardless of where they live, must report worldwide income to the IRS. That includes wages, interest, dividends and income from foreign sources. Accurate and timely filing is required to avoid interest, penalties, and the risk of missing out on available tax credits such as the foreign earned income exclusion. File photo: the Internal Revenue Service Headquarters (IRS) building is seen in Washington. File photo: the Internal Revenue Service Headquarters (IRS) building is seen in Washington. J. David Ake/AP What To Know U.S. citizens or resident aliens whose residence and main place of business or post of duty is outside the U.S. and Puerto Rico, as well as members of the military on duty abroad, qualify for the automatic two-month extension—shifting their filing deadline from April 15 to June 16, 2025. Taxpayers unable to file by June 16 can request an additional extension to October 15, 2025. This extension is limited to filing—not to payment. Interest will accrue on any unpaid taxes starting from April 15, 2025. Electronic extension requests can be submitted through IRS systems, and Form 4868 is available for those unable to file online. Businesses should use Form 7004 for extensions, and can get a six-month extension. The fastest payment options include IRS Online Account, IRS Direct Pay, and the Electronic Federal Tax Payment System (EFTPS). U.S. taxpayers without a domestic bank account can transfer payments directly to the IRS. Debit and credit cards, as well as digital wallets, are also accepted and may include service fees. Individuals affected by the ongoing conflict in Israel, or with residences or businesses in Israel, Gaza, or the West Bank, have their federal filing and payment deadline extended to September 30, 2025. Military personnel on duty in combat zones may also qualify for automatic extensions. Taxpayers with foreign financial accounts holding more than $10,000 at any point during 2024 must submit Form 114 (FBAR) electronically to the Treasury Department's Financial Crimes Enforcement Network. The initial deadline was April 15, 2025, with an automatic extension to October 15, 2025, for those who missed the first date. What People Are Saying Jay A. Soled, professor and chair of the Department of Accounting and Information Systems at Rutgers Business School, New Jersey, previously told Newsweek: "Even with the tax-filing extension, interest will apply to any 2024 tax payments received after April 15. This means that unpaid tax-year 2024 tax balances will begin accruing interest, currently at the rate of seven percent per year, compounded daily, after April 15, 2025." Commenting on why individuals working and living abroad have a two-month filing extension, Soled said it was "undoubtedly a relic of a bygone era when it was difficult for those living overseas to receive third-party information returns." He added that "in light of current technological developments, Congress would be wise to eliminate this exception." Richard D. Pomp, professor of law at the UConn Law School, Connecticut, previously told Newsweek, while discussing why individuals working and living abroad have a two-month filing extension: "The extension is a very old rule that predates the digital economy. Correspondence in those early days took place by mail and the time it took for mail to go back and forth across the ocean could lead to delays that taxpayers living in the country did not experience. In the digital economy, things are far more efficient and the rule is probably unduly generous." He added: "We are currently living through a total state of chaos at the IRS. Whenever possible, taxpayers abroad should file electronically and verify with screen shots and saved files, and copies of all documentation. What Happens Next U.S. taxpayers abroad have until June 16, 2025, to file their returns and pay taxes due for 2024, with eligible individuals able to seek additional extensions or payment arrangements if they are unable to meet this deadline. Taxpayers affected by the Israel-Hamas conflict or stationed in combat zones should review specific guidance and utilize all available IRS resources for support.
Yahoo
02-05-2025
- Business
- Yahoo
The IRS Isn't Answering. Now What?
SmartAsset and Yahoo Finance LLC may earn commission or revenue through links in the content below. What should you do if you need help with your taxes? After a busy filing season, many households are trying to manage a difficult question. What happens if April 15 comes and goes, and you still have unanswered questions about your taxes? It's a relevant question. About one-third of all taxpayers wait until the last minute to file their taxes, and millions more do their taxes within the two-week window of April 15. Each year, many of those households will approach the deadline and realize that they don't fully understand how to do their taxes. Maybe they're not sure about a deduction, maybe they have questions about some form of income. With a dense and layered tax code, not to mention jurisdiction-specific obligations across states and municipalities, this is a field so complicated that accountants and lawyers dedicate their entire professional lives to the issue. So it makes sense that you might have some questions. And the IRS may not be able to help. Agents can be difficult to get on the phone and, when available, they only answer questions about process and filings. They will not help with questions about preparing your taxes themselves. So, whether you're trying to figure out 2024 taxes after the fact or you're thinking of how to improve your process for next year, what should you do if you need help but can't get it? Here's what to know. You can also use this free tool to match with vetted, fiduciary financial advisors if you need help navigating tax laws and the IRS. Even if you think your taxes are (or might be) wrong, file anyway. The IRS provides two main mechanisms for taxpayers who don't know their correct taxes by the annual deadline: filing for an extension or filing an amendment. Both let you address questions or issues with your tax return, but both still require you to file something by April 15. With an extension, you file Form 4868 to request an extension of time to file your tax return. This generally gives you until October 15 to file a completed return, so you don't have to include one with the extension form on April 15. You do, however, need to file the extension request on time. You also need to pay estimated taxes, and the IRS will penalize you if your estimated payment is more than 80% less than your final tax bill. This allows you to avoid filing a significantly incorrect return, although you still need to know enough about your finances to make a ballpark estimate. If you overpay, you will receive a refund when you file your completed tax return in October. With an amendment, you first file a completed tax return by April 15. Then, later, you file Form 1040-X, which allows you to correct any inaccurate or incomplete information on your original filing. In this filing you can claim a refund if you overpaid in April, or you can include an additional payment if you underpaid. As with an extension, the IRS will typically penalize you if you paid less than 80% of your correct tax bill. In all cases, the penalties for error or underpayment tend to be modest. And the IRS will often work with taxpayers to mitigate and occasionally waive penalties in cases of good-faith error. As long as you file. While the IRS will charge interest and penalties for taxpayers who do not pay their full tax bill, it reserves severe penalties for households that don't file a tax return at all. The longer you wait, the higher these penalties can grow. You can always correct a mistake on your taxes, but first you need to file those taxes. You can mitigate or eliminate many problems by accurately reporting your money. One under-appreciated feature of the IRS is that the tax agency generally appreciates how complicated the tax code is. Severe penalties such as audits and investigation are typically reserved for households that hide income, misreport their finances, or that don't file a tax return at all. So, get ahead of these problems. Even if you aren't sure about your tax obligations, make sure to accurately report all income. If you take any deductions or credits, accurately reflect the amount and nature of all spending. From there, you might get it wrong. You might miscalculate your taxes based on your income, say, or incorrectly claim certain spending as a deduction. However, as long as the information you have provided is accurate and complete, the IRS will typically treat this as the good-faith error that it is. The rule of thumb is this: As long as the IRS can read your tax returns and get all the information they need to tell you what you owe, they will generally treat the matter as a miscalculation. If they think you are hiding information, that's when the problems start. Consider consulting a financial advisor if you're interested in speaking to someone about your personal situation. From here, look at the nature of your problem. If your question is procedural, an IRS agent can often help. This means that your question must relate to filing, paperwork or other process matters. IRS agents can't answer questions about your specific tax situation. However, if you need to know general matters or have a question about how to file your taxes, taxpayer services can be invaluable. You can contact the IRS either by calling their main line or by scheduling an appointment in person with one of the agency's various offices. Be prepared for significant wait times. You can also look into the IRS' Free Filing website, where qualifying households can use the agency's tax filing software for free. Other households can contact the Volunteer Income Tax Assistance program. This program offers free assistance with tax preparation, meaning that it can help you with substantive tax questions that IRS agents cannot. It is generally available to the following households: Those making less than $67,000 per year Those over the age of 60 Those with qualifying disabilities Those with limited English Beyond that, for relatively straightforward tax matters, third-party a software solution can often get you to good enough. Programs like TurboTax or H&R Block can handle most common tax situations, even for small business owners and the self-employed. If your problem is relatively small dollar-value, typically less than $10,000, or is low-complexity, then software can work. This solution will generally cost you several hundred dollars. For larger or more complicated tax matters, software is generally a bad option. If you have a lot of money at stake, typically more than $10,000, or if you have a complicated or ambiguous tax situation, then you generally should not rely on tax software. In these cases, you will want to hire a professional to help you manage the issue. Depending on the exact nature of your problem, this can mean an accountant, a financial advisor, or a tax attorney. Most importantly, consider hiring a professional if you need to interact with the IRS about a substantive matter. Professionals are much better suited for contacting the IRS directly, given that they have both time and contacts to do so. If your situation requires questions and answers, or if you have significant ambiguity, a professional may be your best bet. Finally, what caused all of this difficulty in the first place? Taxpayer service is the agency term for general customer support. This is the group you reach when you call to ask a question, anything from help filing your taxes to requests for an installment plan. Over the past 15 years, Congress has decimated the ranks of this department. The reason goes back to politics. When the Barack Obama Administration passed its signature health care law in 2009 (the Affordable Care Act, or "ACA"), it made taxes the primary mechanism for the law's various benefits and requirements. In response, Republican opposition led several rounds of cuts to the IRS' budget, which weakened enforcement of the ACA by forcing the IRS to reduce associated headcount. In total, between 2009 and 2016, Congress cut the agency's budget by approximately 20%. However, the IRS broadly has two categories of mandate, known as discretionary functions and required functions. Discretionary functions are areas where the agency can choose its level of engagement. Required functions (sometimes called "statutory duties") are services the IRS must perform if at all possible. So, whenever the IRS loses money, it must take the cuts from its discretionary functions. Like collecting income taxes, Affordable Care Act oversight and enforcement were written as statutory duties. No matter how much Congress slashes the IRS' budget, it must attempt to distribute and collect funds associated with the ACA. This led to a feedback loop. Congress cut the IRS' budget to reduce ACA enforcement. But the IRS couldn't reduce ACA enforcement. So, with enforcement undiminished, Congress cut the IRS' budget again. Those cuts fell on discretionary functions, most prominently audits and taxpayer services. Beginning in this era, the number of annual audits collapsed. This reduction was focused on high-income/high-net worth taxpayers, who have the most complicated taxes and (as a result) the most resource-intensive audits. Taxpayer services, never generous, also fell through the floor. At the low point in 2022, the agency was answering just 10% of phone calls from taxpayers. Wait times for people who did reach an agent exceeded 30 to 60 minutes, leading the agency to establish a practice of automatically hanging up on people who had been on hold for too long. The IRS also established a policy against answering substantive tax questions on the phone. Filers can call taxpayer services to ask process questions, meaning questions about how to file or the status of their filings, but they cannot get help with questions about the taxes themselves. Some in-person IRS centers do offer this service, but it is intermittent. Over the past two years, some of those problems have begun to ease. During the Joe Biden Administration, Congress passed a sprawling bill known as the Inflation Reduction Act. Among many other provisions, this bill provided for a significant increase to IRS funding. This has allowed the tax agency to increase its staffing, to the point where that average wait times to speak with an IRS agent have dipped to 3 minutes. About 32 percent of everyone who calls speaks with an agent, still a small minority but triple the previous numbers. But the changes continue. Taxpayer services was subject to recent firings and budget cuts at the IRS. Congress has cut approximately $60 billion from the tax agency's funding since January 2025. The Donald Trump Administration, particularly through Elon Musk's DOGE team, has laid off approximately 7,000 workers, most of whom were recent hires in IRS' expansion of taxpayer services and audits. The Trump Administration has announced that it intends to continue layoffs, and may ultimately lay off up to half of the agency's 90,000 person workforce. So, taxpayers should expect less help going forward from the IRS. And remember, one option is to reach out to a financial advisor who may be able to help you navigate your situation. What should you do if you don't know how to file your taxes? The first thing to do is always file by deadline. Don't miss the April 15 deadline, because you can always file for an extension or an amended return if you think your taxes are wrong. Beyond that, consider some options for getting help based on what you need. Millennials have hit a new financial era. Now in their 30's and early 40's, this cohort has entirely different needs to begin considering. This means they need to start making entirely different tax moves. Now. A financial advisor can help you build a comprehensive retirement plan. Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now. Keep an emergency fund on hand in case you run into unexpected expenses. An emergency fund should be liquid — in an account that isn't at risk of significant fluctuation like the stock market. The tradeoff is that the value of liquid cash can be eroded by inflation. But a high-interest account allows you to earn compound interest. Compare savings accounts from these banks. Are you a financial advisor looking to grow your business? SmartAsset AMP helps advisors connect with leads and offers marketing automation solutions so you can spend more time making conversions. Learn more about SmartAsset AMP. Photo credit: Grok The post The IRS Isn't Answering. Now What? appeared first on SmartReads by SmartAsset. Sign in to access your portfolio
