Did you file an extension in your 2023 federal tax return? If that’s the case, the six-month grace interval to get your taxes filed with out further failure to file and late fee penalties is quickly closing. Actually, October 15, 2024 is simply across the nook, so now’s the time to just be sure you do file your return by this date.
Doing so will take it off your to-do checklist and scale back your tax penalty burden if you have already got one to deal with. Many taxpayers, freelancers included, aren’t clear about what an extension on their taxes actually means, and deal with it. To assist minimize by the confusion, listed below are some details about what an extension in your freelance taxes means, and how one can navigate it successfully in your private and freelance taxes.
An extension is just an settlement between you and the IRS that so long as you file on or earlier than the 6-month mark after the unique deadline, you’ll not be topic to failure-to-file penalties.
In actuality, an extension will not be an extension on the tax fee you owed on the April unique submitting deadline. Your 2023 tax legal responsibility was due, in full, on April 15, 2024. Except. That’s, you took motion if you realized you couldn’t pay and submitted IRS Type 4868 to increase your tax return.
Understand that when you didn’t file an extension and also you didn’t make a fee together with your extension otherwise you paid after April 15, 2024, the IRS might assess a late-filing penalty of 5% per thirty days of the tax owed and a late fee penalty of 0.5% a month of the tax due. The utmost late submitting penalty is 25% and the late-payment penalty most is 25%.
Be certain your tax information are full, present, and safe.
If you’re lacking info or want up to date or corrected varieties with the intention to file your taxes, it’s crucial to make use of the subsequent few weeks to get the knowledge you want (the guidelines beneath may help) so you can also make the tax return extension deadline on October 15, 2024. All information have to be saved for at least three years after submitting your taxes, these embody however aren’t restricted to:
- W-2s or Type 1099s, you should definitely contact the issuing group and request the lacking paperwork. This additionally applies when you obtained an incorrect W-2 or Type 1099. If you don’t obtain the lacking or corrected kind in time to file your tax return, you may estimate the wages or funds made to you in addition to any taxes withheld. In the event you obtain the lacking or corrected Type W-2 or Type 1099-R after submitting your return and the knowledge differs out of your earlier estimate, you will need to file Type 1040-X, Amended U.S. Particular person Earnings Tax Return.
- In the event you obtain an incorrect Type 1099-G for unemployment advantages, it’s best to contact the issuing state company to request a revised Type 1099-G.
In the event you aren’t positive of an quantity or are nonetheless ready for paperwork, keep in mind, you’ve three years from the due date or the date you filed to amend your tax return, when you have a refund due. You probably have no refund due, you’ve greater than three years to file an amended tax return, Type 1040X, nonetheless, you may be topic to curiosity and penalties on the excellent steadiness.
Did your state expertise a pure catastrophe this yr? You’ll have an automated extension.
One other doubtlessly surprising submitting extension could also be legitimate in your freelance tax state of affairs in case you are in a federally declared catastrophe zone. If that is so (you may look to see in case your state has any federal catastrophe zones recognized, chances are you’ll be eligible for this extension. The Federal Emergency Administration Administration has a list of this info at Disasters and Different Declarations | FEMA.gov.
Failure to file your tax return extension might influence your passport.
The IRS is severe about delinquent tax filers! You probably have important unpaid federal tax debt (together with assessed penalties and curiosity in your prolonged taxes) totaling greater than $62,000 (adjusted yearly for inflation) from obligations together with U.S. particular person earnings taxes, belief fund restoration penalties, enterprise taxes for which taxpayers are personally accountable for and different civil penalties, chances are you’ll be in danger for dropping your passport, too.
The IRS clearly states that when you have this sort of severe tax debt, they need you to remain near the USA and can take excessive measures akin to garnishing your passport.
Take motion now and deal with your prolonged freelance tax return!
With the October 15 tax extension deadline just some weeks away, don’t delay getting your prolonged freelance taxes filed now. The time you spend right this moment taking good care of it will assist you to scale back your final time, monetary, and stress associated to taxes so you may concentrate on ending 2024 robust in your freelance enterprise and file your subsequent annual tax return away from any further penalties or earlier freelance tax points.
