IRS New Update – Before October 15, 2024, taxpayers who have not yet filed their 2023 tax returns must act. Even if you qualify for an extension, it’s vital to file your return as soon as possible to avoid penalties. If you’ve already received an extension, remember you must still pay any taxes owed by April 15, 2024. Delaying your filing could result in penalties that only make the financial burden worse.
Tax Refund
Approximately 2% of the average tax refund increased from 2023 to $2,869 as of May 10, 2024, according to the IRS. Direct deposit is the most popular method of refunding, with an average refund of $2,960, an increase of 3.1% from the previous year. In spite of the welcome relief of receiving a refund for many, others may face a different outcome: paying taxes owed rather than receiving money back.
IRS New Update Refund Statistics
| Refund Type | Average Amount (2024) | Percentage Increase from 2023 |
|---|---|---|
| Total Refund | $2,869 | 2% |
| Direct Deposit | $2,960 | 3.1% |
Not Filing on Time
Despite the fact that some taxpayers receive refunds, some face the unpleasant reality of owing money to the IRS. Failing to pay taxes can result in penalties and even IRS debt, which becomes increasingly difficult to manage the longer it remains unpaid.
It is possible to be penalized if you do not file by October 15, 2024 extension deadline. Each month (or part of a month) that your return is late is subject to a penalty equal to 5% of the unpaid taxes up to 25%. Furthermore, you could also face a penalty for failure to pay, which further increases your liability.
Failure to File Penalty:
| Delay Period | Penalty Rate (%) per Month | Maximum Penalty (%) |
|---|---|---|
| 1-5 months | 5% per month | 25% of unpaid taxes |
You can incur penalties up to 25% of your tax owed if you delay filing your return. If you’re struggling to pay, reach out to the IRS to discuss payment options.
Penalties Avoided
It is already possible to be penalized for missing the April 15 payment deadline, but if you file before October 15, you can still avoid further consequences. Even if you cannot pay the full amount, filing on time minimizes penalties, and establishing a payment plan with the IRS will help you avoid the compounding costs of unpaid taxes.
Filing Now is Critical
If you file your tax return sooner rather than later, you can avoid further penalties and financial strain. Waiting until the last minute increases your stress as well as opens the door to unnecessary fees. If you are unable to pay your taxes in full, the IRS offers resources and payment plans, so it is always best to act now.
Staying on top of your tax obligations can prevent financial headaches. Filing on time, even after an extension, is crucial to managing your finances responsibly.
