Time is getting tight for taxpayers who haven’t yet filed their 2021 federal tax returns. The Internal Revenue Service (IRS) is sending out one last reminder that the deadline to file and pay taxes owed for most individual income tax returns is Monday, April 18.
The agency also wants late filers to know that if they need help or feel they need to request an extension, they can contact the agency 24 hours a day on IRS.gov.
Electronic filing is the way to go
The IRS said filing tax returns electronically is currently the preferred method since we're so close to the filing deadline. The agency said currently available tax software can do all the calculations, catch common errors, and prevent mistakes by prompting taxpayers for any missing information. Filing electronically is also the fastest way to receive a refund, and using direct deposit is the quickest way to get a refund into a taxpayer’s bank account.
There’s also IRS Free File, which is available to any individual or family that had an adjusted gross income of $73,000 or less in 2021. IRS makes Free File Fillable Forms available to anyone who is comfortable preparing their own tax return.
Accuracy also counts, especially for taxpayers who have things like Advance Child Tax Credits and Economic Impact Payments to deal with. Consumers who are in that sort of situation should use the IRS’ Online Account service. Going that route provides all the information to help file an accurate return.
Need more time?
If you’re up against the clock and don’t think you can make the April 18 deadline, you’re not alone. The IRS estimates that 15 million taxpayers will also request an extension.
“In a matter of minutes, anyone can request an extension until October 17, using Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return,” the agency said. “An extension of time to file is not an extension of time to pay, however, and taxpayers must estimate their tax liability on this form and pay any amount due by the April 18 filing deadline to avoid penalties and interest.”
The agency said it would be wise for taxpayers who are requesting more time to pay all or part of their estimated income tax due and indicate that the payment is for an extension. There are three ways to do that electronically: Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or by paying with a debit card, credit card, or digital wallet.
“This way they don't have to file a separate extension form and will receive a confirmation number for their records,” the agency said.
For taxpayers who prefer to go the old fashion mail-in route, they need to download IRS Form 4868 from Forms, Instructions & Publications. They will need to complete and send that form to the correct IRS office by the April 18 filing deadline.
Don't forget to answer the cryptocurrency question
One of the most glaring gaffes taxpayers are making this year is not filing out the cryptocurrency question on the front page of their tax return.
On the front page of Form 1040, Form 1040-SR, and Form 1040-NR is a checkbox regarding “virtual currency” – meaning Bitcoin, Ethereum, and all other cryptocurrencies. The question on the return asks, "At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?"
The IRS says the question “must” be answered by every single taxpayer, not just the ones who bought or sold cryptocurrencies in 2021.