WASHINGTON
— The Internal Revenue Service has received 103.6 million 2016
individual income tax returns as of April 7 and expects millions more to
be filed by the April 18 deadline. Special filing deadline rules apply
to members of the military serving in combat zones, those living outside the U.S. and those living in declared disaster areas.
The
IRS also expects more than 13 million taxpayers to request a filing
extension, giving them six additional months to complete and file their
tax return.
Who Needs to File?
Not everyone is required to file a tax return. The
requirement to file depends on a person’s income, filing status, age
and whether they can be claimed as a dependent on someone else’s return.
Anyone not sure whether they need to file a return should see Do I Need to File a Tax Return or refer to Publication 17, Your Federal Income Tax for Individuals, on IRS.gov.
For
an estimated one million taxpayers who did not file a 2013 tax return,
April 18, 2017, is the last day to file to claim their part of tax
refunds totaling more than $1 billion. Taxpayers
due a refund must file a return within three years of its due date or
the money becomes the property of the U.S. Treasury. There are no late
filing penalties if a refund is due.
According to the IRS, the most common reasons people do not file a return who should are: they
don’t know how, may not have the documents needed or owe more tax than
they can pay. Taxpayers who owe more than they can pay should pay as
much as they can by the due date in order to minimize interest and
penalties.
Extensions of Time to File
Taxpayers
who are not ready to file by the deadline should request an extension
of time to file. An extension gives the taxpayer until Oct. 16 to file
but does not extend the time to pay. Penalties and interest will be
charged on all taxes not paid by the April 18 filing deadline.
IRS
will automatically process an extension of time to file when taxpayers
select Form 4868 and they are making a full or partial federal tax
payment using IRS Direct Pay, the Electronic Federal Tax Payment System or by paying with a credit or debit card
by the April due date. There is no need to file a separate Form 4868
extension request when making an electronic payment and indicating it is
for an extension.
Taxpayers also can complete and mail in Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, to get a six-month extension.
Taxpayers Who Can’t Pay
Taxpayers should file by the deadline,
even if they can’t pay, or pay as much as possible and ask the IRS
about payment options. By filing a tax return, even without full
payment, taxpayers will avoid the failure-to-file penalty. This penalty is assessed when the required return is not filed by the due date or extended due date if an extension is requested.
The failure-to-file penalty
is generally 5 percent per month and can be as much of 25 percent of
the unpaid tax. The penalty for returns filed more than 60 days late can
be $205 or 100 percent of the unpaid tax.
The failure-to-pay penalty,
which is the penalty for any taxes not paid by the deadline, is ½ of 1
percent of the unpaid taxes per month and can be up to 25 percent of the
unpaid amount. Taxpayers must also pay interest on taxes not paid by the filing deadline.
The
IRS reminds taxpayers that there is no law that permits taxpayers to
refuse to file a federal tax return or refuse to pay their taxes. This
includes for reasons based on programs or policies with which they
disagree on moral, ethical, religious or other grounds. Taxpayers who
file a frivolous tax return can be assessed a $5,000 penalty and civil
penalties of up to 75 percent of the underpaid tax. Frivolous
tax returns are those tax returns that do not include enough
information to figure the correct tax or that contain information
clearly showing that the tax reported is substantially incorrect.
