Hello, April! You’re a month we love to see arrive. You’re also a month we dread.
On the positive side, we welcome the consistent warmth you bring most of us. We’re more than ready to stow our winter, or even winter-adjacent, apparel for a while.
And, of course, baseball is back in full force!
But then, April, your arrival brings a dreaded task. Millions of us must confront the filing of our annual federal — and in most cases, state — tax return.
In between ball games and enjoying sunny, warm days, here are some tax moves to consider this April.
1. Electronically file for free. Tax Day is just 14 days away, and the Internal Revenue Service is waiting on literally millions of returns. If you're among these later filers, don't panic. You still have plenty of time to finish that Form 1040.
The easiest way for do-it-yourselfers to accomplish this annual tax task is to go electronic. It’s also the filing method the IRS prefers. In fact, Uncle Sam’s tax collector recommends a couple of tax preparation and e-filing methods that, for eligible taxpayers, is free.
There is, of course, Free File, the no-cost online tax program offered by the IRS and its tax software industry partners in the Free File Alliance. This year, eight software companies return to offer their programs to taxpayers with 2024 adjusted gross income (AGI) of $84,000 or less, regardless of filing status.
Direct File is another IRS-connected free online tax prep and electronic filing option. This program, created by the IRS and handled directly by the agency, no software middleman involved, is available this year to eligible taxpayers in 25 states.
2. Get more time to finish your 2024 return. If you just can’t finish your return, be it by hand or electronically, by April 15, get more time. The IRS is happy to give you six more months to complete your annual tax task.
All you have to do is (1) file your Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, and (2) send in any tax you owe by Tax Day.
This is a win-win for both time-crunched taxpayers and Uncle Sam's tax collector. The IRS would much rather get your extension request by April 15 than deal with an error-ridden return you submitted in a last-minute filing frenzy.
Form 4868 will get you until Oct. 15 to file your accurate paperwork. But note that second part of filing the form. You pay any tax due or, per the form's instructions, "as much as you can" when you send in your extension request.
3. Pay, or make arrangements to, any 2024 tax you owe. Since you must pay your tax due even without filing, now is the time to explore ways to cover the amount you owe if it’s unexpectedly large.
One option is paying your tax bill over time. The IRS itself offers a variety of payment plan options.
Installment payments will cost you a little more in interest and, in some cases, application fees, and you'll avoid late- or non-payment penalty charges. More importantly, a payment plan will keep the IRS from coming after you for tax evasion.
Another payment option is to put your due tax on a credit card. This could be a good move if you earn rewards for charges. But note that if you can't pay off your plastic balance quickly, you'll face interest charges that typically are much higher than IRS installment plans or some private lenders charge.
4. File your 2021 tax return. No, that’s not a typo. Every year, some taxpayers don’t file returns. And some of those nonfilers miss out on tax refunds they are due. That’s the case for more than 1.1 million people across the United States who didn’t file a 2021 tax year return in April 2022
They missed out, collectively, on more than $1 billion in refunds. The IRS estimates the median refund amount due these nonfilers is $781, meaning half of the refunds are more than $781 and half are less.
But regardless of the potential refund amount or why these folks didn’t file three years ago, they are all facing the same deadline now. If they don’t file their 2021 return by this April 15th, they’ll forfeit their old refunds.
That’s because U.S. tax law says that if you don’t claim refund money within three years, it stays in the U.S. Treasury. The original filing date for those unfiled 2021 tax year 1040s and associated unclaimed refunds was April 15, 2022. So, the three-year claim-or-surrender deadline is this year’s Tax Day, April 15.
5. Make your first 2024 estimated tax payment. I know, estimated taxes are a major pain in the backside. But they are required to be paid on income that's not subject to withholding. Miss one of these four payments, or pay too little, and you could face underpayment penalties and interest charges.
So as you're working on your 2024 taxes, make sure you run your expected 2025 tax year numbers, too. Then make the first of these four extra tax payments for the current tax year on April 15.
Yep, estimated tax for the first quarter of the year is due on the same April day as your tax filing deadline for the previous tax year. I know. Conveniently annoying.
More April tax moves: Four of these five April tax tasks focus on finishing up, and paying, 2024 tax returns. That's because that's the biggest current concern of tax filing procrastinators.
If you've already filed, or are in good shape to meet the April 15 deadline, you can find some additional April Tax Moves in the ol' blog's right column. As is the custom, these monthly pieces of tax advice are listed under the countdown clock that's keeping track of the countdown to Tax Day 2025.
Yes, some of those sidebar tips focus on April 15, too. But there also are some general tax tidbits, as well as tax actions to take once you've filed your returns.
Wherever you are on the tax filing season spectrum, take a few minutes to peruse them and see if they apply to your tax situation.
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