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HomeFinance NewsFiling Tips: Timely Submissions, Extensions, and IRS Penalty Prevention

Filing Tips: Timely Submissions, Extensions, and IRS Penalty Prevention

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As Tax Day approaches, many Americans are feeling the pressure of filing their taxes on time. It is a task that is widely disliked, ranking high on the list of most hated responsibilities. Procrastination is a common mistake people make when it comes to taxes, but avoiding it can lead to penalties and unnecessary stress. The key is to gather the necessary documents, such as W2s, 1099s, and 1098s, and either use software like TurboTax or seek help from a professional tax preparer.

Failing to file on time can result in penalties from the IRS, with a five percent penalty added for each month you are late, up to a maximum of 25% of your unpaid taxes. However, taxpayers can request an extension to avoid some of these penalties, giving them an additional six months to file until October 15, 2024. It is important to note that an extension does not grant additional time to pay taxes, and interest will accrue from April 15th onwards.

For those fortunate enough to receive a tax refund, there is some positive news to look forward to. The average refund this year is around $3,050, which is about 5% higher than last year. To expedite the refund process, taxpayers are advised to file electronically and opt for direct deposit. Despite the stresses that come with tax season, being organized and taking advantage of available resources can help individuals navigate the process more smoothly.

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