Less than half of the Americans who the IRS expects to file individual returns did so for the week ending March 24.
Only about 80,7 million returns had been received, down 0.8% from the same time last year and well below the IRS’s forecast of more than 168 million individual returns.
If you belong to the first group, the IRS is processing returns and issuing refunds faster than in 2022. It has processed 1.9% more returns and issued 2.6% more refunds compared to the same time last year. The average refund has decreased by 11%, falling to $2,903.
However, here is what you need to know if you need to file an extension.
What is a tax extension?
It is important to note that filing for an extension gives you an additional six months to file your tax return, but not to pay the amount you owe. You should estimate your tax liability and pay it by the due date to avoid possible penalties.
Extended filing deadline for tax returns that have been granted an extension
A request for an extension must be submitted by the April 18 deadline. The new deadline is October 16 due to the fact that it is immediately upon filing. If you owe taxes and do not file for an extension, the IRS will charge you a steep late filing penalty.
According to the IRS, if you are due a refund or are not required to file, you will not be charged a penalty. According to experts, this could be a risky strategy. If you miscalculated and owe money, you may have to pay a hefty penalty.
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How to apply for a tax return extension
The extension request process is simple and free. If you owe money, you will need to provide your name, address, Social Security number, estimated tax liability, and payment information.
In order to avoid an underpayment penalty, the IRS states that taxpayers must owe less than $1,000 or have paid at least 90% of the tax shown on the return for the taxable year or 100% of the tax shown on the return for the prior year, whichever amount is less.
Using IRS Free File, taxpayers of all income levels can electronically request an extension. Alternatively, you can pay your estimated tax liability electronically and indicate the payment is for an extension. With Direct Pay, Electronic Federal Tax Payment System (EFTPS) or a credit or debit card can be used to make payments.
Form 4868 must bear a postmark no later than April 18 if you choose to mail it in.
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