The 2022 tax season was rocky — from an IRS processing backlog to refund delays and filing errors as a result of changes to the tax code.
As a result, the IRS predicted more than 15 million taxpayers would file for an extension this year. If you were among that group, you have until Oct. 17 to submit your return, even if you’ve already paid your estimated taxes owed to the IRS.
Tax preparers across the country, like Rob Cordasco, CPA at Cordasco & Company in Savannah, GA, are anticipating a filing rush as the October extension deadline approaches, just like they saw at the end of this year’s regular tax season. “That’s always our challenge, trying to get people not to procrastinate.”
The IRS is urging taxpayers to submit their tax returns electronically ASAP, too. If you’re eligible for a refund, filing earlier can help put more money in your pocket to begin to pay off debt as Fed rates continue to rise or to offset expensive summer vacation costs. And if you owe taxes, waiting longer to file could mean paying more in interests, penalties, and other fees.
There’s still time to get ahead of the last-minute rush. Here’s what to know if you haven’t filed:
File Your Return As Soon As It’s Ready
With millions of taxpayers still waiting to file their returns, it’s best to get ahead of the October deadline. There may be more limited resources for professional assistance the longer you wait, Cordasco says. “Those that procrastinate the longest usually end up at the back of the line,” he says.
As the IRS deals with its processing backlogs and staff shortages, the agency, too, advises filing as quickly as possible — rather than waiting until the October extension deadline.
“We continue to urge people to file electronically and do it as soon as possible,” said IRS Commissioner Chuck Rettig in a recent statement. “Even if people have an extension to file until October, sending the tax return as soon as possible can either help get them a refund quicker or it can save them money if they owe by avoiding additional interest and penalties.”
The IRS is recommends electronically submitting your return for faster processing, security, and to get your refund sooner.
Prepare for Higher Filing Costs
Before the April 18 deadline for filing 2021 tax returns, there were a number of offers for cash back rewards and savings on tax prep software, some of which may still be available for those who filed for an extension. Keep in mind that some of these deals may be targeted, and only available for a limited time.
If you’re planning to work with an expert to file you return, expect some tax preparers to charge more this year to account for tax law changes and more complex returns, Michele Cagan, CPA, founder of Single Mom CPA and author of “Debt 101,” previously told NextAdvisor.
And the longer you wait, the more likely you’ll have to pay a premium closer to the deadline, says Cordasco.
The best thing you can do to prepare is organize your documents ahead of time, and start as soon as you can. You may be able to file your taxes online for a lower price if your return is straightforward. But if you think you’ll need a professional, it’s best to get help ASAP to avoid paying more closer to the deadline.
What to Do if You’re Waiting for Tax Documents
If you’re waiting to file because you still haven’t receive the documents required for a complete return — such as a W-2 or 1099, you’re not alone. In fact, Cordasco predicts that most people who haven’t yet filed are still waiting to receive their tax information.
If you filed for an extension, you should have also submitted any estimated taxes owed by the April 18 deadline. If you haven’t yet paid and you believe you may owe taxes, you could be accruing interest and penalties. In addition to filing your return, make sure you pay any taxes you owe as soon as possible to avoid even higher costs.
You may be able to retrieve some of your documents by looking at your tax transcript online through the IRS. You can also reach out to the organization or company that owes the forms to find what’s causing the delay.
If you’re unable to get the proper documents to file your taxes, the IRS recommends still filing by the deadline; you can estimate the information and file an amended return later if necessary.