What happens if you don't file taxes? Answers to your questions as tax deadline approaches
The tax filing deadline this year, thankfully, is not April 15. Now, time for the reality check. This year's income tax deadline — April 18 for most taxpayers — is just around the corner.
As last-minute filers crunch the numbers, it's essential to ignore the myths, watch your math and keep plugging away. Here are some points to consider in the final hours ahead.
How to file a tax extension
Regardless of your income, you can request an extension to file your taxes by using IRS Free File at IRS.gov. By filling out Form 4868, you can get a six-month extension –up to Oct. 16 – to submit your return.
But take note: your tax bill is still due on April 18. You're getting an extension to file, not an extension to pay. If you think you owe money, it's important to pay as much as you're able by April 18 to avoid interest and penalties.
The IRS has estimated that more than 20.5 million forms will be filed either electronically or by paper nationwide requesting an extension in 2023.
If you receive an extension, you do not have to wait until October to file the return. It's best to file it as soon as you have all the necessary paperwork that enables you to file an accurate return.
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Is everyone required to file by April 18?
The IRS has a long list of federally declared disaster areas where the April 18 deadline will not apply. In those cases, you don't need to file a Form 4868 to get an automatic extension. Victims of severe storms and tornadoes in Tennessee that hit March 31 and April 1, for example, now have until July 31 to file and make payments for their federal income taxes.
The IRS is also offering such relief to tax filers hit by disasters in several other states including California, Alabama, Arkansas, New York, Mississippi and Georgia. Check the IRS.gov website for details.
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What happens if you don't file taxes?
It's true that many people aren't required to file because their incomes are so low that they're not obligated to do so. But did you have taxes withheld from a paycheck that could be returned to you via a tax refund? Did you make estimated payments?
By filing a return, you might get some money that was withheld back in the form of a refund. And many working lower-income households would get a bigger tax refund if they qualify for the earned income tax credit.
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The IRS has an online tool at IRS.gov to help you figure out if you must file a tax return. It's called: "Do I need to file a tax return?" You'd need your filing status, the federal income taxes withheld (shown on a W-2 or year-end paycheck) and other basic information to help you determine your gross income. New filing thresholds are set each year.
If you're single and under age 65, for example, you'd be required to file a federal income tax return if you made more than $12,950 in 2022. If 65 or older, the threshold is $14,700 for a single person, according to the IRS.
If married filing jointly and if both spouses are younger than 65, the threshold is more than $25,900 for both spouses together, according to the IRS. Your age is determined by how old you were on Dec. 31, 2022. The thresholds are slightly higher for those who are older.
The IRS notes that self-employed individuals are required to file an annual income tax return and pay estimated tax quarterly if they had net earnings from self-employment of $400 or more.
What happens if you file taxes late?
People who owe money — or imagine that they owe a great deal of money — might want to go into hiding. But ignoring your taxes only makes matters worse because you'll be hit by a steep penalty for failing to file if you owe money or did not request an extension.
A failure-to-file penalty of 5% of the unpaid tax is assessed each month, or part of a month, the return is late, up to a maximum of 25%. It adds up quickly.
The National Taxpayer Advocate gave an example in a blog published April 12. Take a person who owes $3,000 in federal income taxes. Perhaps the person doesn't file a return or request an extension because they figure they'll just file when they can afford to pay.
In this example, the taxpayer "could incur $750 in penalty, plus interest, within five months," the blog noted. "Even when the amount of tax due on a taxpayer’s return is not large, but the return is over 60 days late, there is a minimum failure-to-file penalty that is the lesser of $435 or 100% of the tax required to be shown on the return."
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What happens if you file taxes wrong?
Sometimes, you file a return and then discover that you've made a mistake. Maybe you didn't spot some paperwork, like a 1099 for a mutual fund held outside of a 401(k) plan. Or maybe it's a simple math error.
The IRS has a tool online to help you decide if you need to amend a return. Taxpayers can use the Should I File an Amended Return? tool at IRS.gov to help decide if they should correct a mistake or make other changes.
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What happens when 2 plus 2 doesn't add up to 7? Don't file an amended return to fix a math error or if you forgot to attach a form or schedule. The IRS says it will correct the math error while processing the return and notify you by mail. You'd get a letter requesting any missing forms or schedules.
File an amended return if there's a bigger issue, such as a change in income or the amount of tax you owe. If you made a mistake with a deduction, you'd need to file an amended return, too.
See Form 1040-X, Amended U.S. Individual Income Tax Return. You can file electronically for 2020, 2021 or 2022 in many but not all cases. Taxpayers who file an amended return electronically can receive any refund by direct deposit to their bank account. But that option is not available for those who file on paper.
The IRS notes that you cannot e-file an amended return if you're "amending a prior year return originally filed on paper during the current process year." If so, the amended return must also be filed on paper.
Contact Susan Tompor: stompor@freepress.com. Follow her on Twitter @tompor. To subscribe, please go to freep.com/specialoffer.