IRS Update: Approaching Deadline, Average Tax Refunds, and Penalties for Late Filing
The Internal Revenue Service (IRS) has reminded taxpayers that there is no need to wait until the October 15, 2024 deadline to file their 2023 tax return. Bear in mind that some taxpayers have qualified for an extension of time.
However, they must have paid all the tax they owe the IRS before April 15, 2024. Or else, they may have to face the failure to pay penalty set by the agency, which is unpleasant if you are on a shoestring budget. So do not wait for the October 15 deadline and file now.
Average Tax Refunds Unveiled by the IRS
As of May 10, 2024, the average tax refund amount is $2,869 said the IRS. That is about 2% higher than in 2023. Some taxpayers requested a direct deposit but others still prefer a paper check.
Those taxpayers who requested a direct deposit got an average direct deposit worth $2,960, which is about 3.1% more than in the previous year. Hopefully, you can receive a similar amount.
Nevertheless, some taxpayers may not get a tax refund, instead, they must pay a great deal of money on tax liability. Those who run out of cash may end up not paying it which can result in debt and penalties to the IRS.
IRS Failure to File Penalties
If you qualify for a filing extension and you can file by October 15, but you fail to do so, you may have to face the consequences. According to the IRS, the penalty you must pay is a percentage of the taxes you were not able to pay on time.
The more you delay your tax payment to the IRS, the higher the penalty will be. For example, the failure to file a penalty is 5 percent of the taxes you did not pay for each month (or part of it) that a tax return is late.
The Internal Revenue Service claims that the penalty will not go over 25 percent of the taxes you did not pay. A failure to pay a penalty may apply in some cases as well. Combined penalties are possible. Besides, a penalty may also max out, so watch out.
