As Tax Day 2023 approaches, it's time to get your finances in order, so you don't miss the final filing day.
Filing your taxes on time can help you stay organized and avoid the stress of a looming tax deadline. Don't wait until the last minute to file your taxes – take care of them as soon as possible to protect yourself and your finances.
Below, we'll answer “when are taxes due in 2023?” the importance of the tax deadline, and other important dates to consider.
Traditionally, January 1 through April 15 is considered tax season. However, the 2023 Tax Day deadline has shifted to Tuesday, April 18, due to the usual date falling on a Saturday this year. Most states are also extending the tax filing deadline in 2023 in observance of the Emancipation Day holiday, which falls on Monday, April 17.
You must file income earned throughout 2022, and any outstanding taxes must be paid by this date. Dates for filing state income taxes vary.
The Internal Revenue Service (IRS) typically begins accepting completed tax returns at the end of January. Taxpayers will have roughly three months to compile the necessary documents, file their returns, and make any required tax payments.
If you need more time to file your return, you can request an extension by filing Form 4868, an application for an automatic extension of time to file a U.S. individual income tax return.
Filing your taxes on time ensures that you comply with the law. The IRS requires all taxpayers to file their tax returns by the April 18 deadline unless they receive an extension. If you fail to file your taxes on time, you may be subject to penalties and interest charges.
In addition to complying with the law, filing your taxes on time can also help you avoid costly fines and fees. If you owe taxes and do not file your return or make arrangements to pay by the deadline, you may be charged late payment penalties and interest on the unpaid balance. These charges can quickly add up, increasing the overall amount you owe.
Filing your taxes on time can also help you receive any tax credits or refunds you may be entitled to more quickly. If you are eligible for credits such as the Earned Income Tax Credit or the Child Tax Credit, filing your taxes on time can help you receive the maximum benefit.
Essentially, if you are expecting a refund, the sooner you file your tax return, the sooner you will receive your money.
Additionally, filing your taxes on time can give you peace of mind and help you avoid the stress and anxiety of the tax filing process. By getting your taxes done early, you can avoid the last-minute rush and focus on other essential tasks and responsibilities.
There are some key factors that you need to keep in mind when it comes to filing your taxes in 2023.
You can request a deadline extension up until April 15. Regarding businesses, the deadline to file for an extension is March 15 for S corporations and partnerships and April 18 for C corporations. On April 18, 2023, you can still submit your request for a tax extension if you are an individual. However, filing for an extension doesn't exempt you from paying your taxes on time.
If you can't pay your tax bill in full by April 18, you can set up a payment plan on the IRS website and make affordable monthly installments instead. Just note that you'll have to pay interest if you do this.
Here are some important dates to keep in mind for the 2023 tax season:
Small business owners, independent contractors, and freelancers must submit their fourth estimated quarterly tax payment for 2022.
If you have staff, you should prepare two W-2 forms, one for the worker and one for the IRS.
If you take on independent contractors and pay them more than $600 in a financial year, you must submit Form 1099-NEC. Copy A will go to the IRS, and Copy B will go to the contractor.
Tax preparation time is shorter for an S corporation or partnership. You must submit returns for partnerships (Form 1065) and S corporations (Form 1120-S) to the IRS by March 15.
This is the final day for individuals to file their Form 1040s, C corporations to file Form 1120s, and sole proprietors to file Schedule C.
It is also the first due date for businesses that must pay estimated quarterly tax payments.
This day is the second due date for businesses that must pay estimated quarterly tax payments.
This day is the third due date for businesses that must pay estimated quarterly tax payments.
Additionally, tax return extensions filed by S corporations or partnerships are due this day.
Tax return extensions filed by individuals, sole proprietors, and C corporations are due this day.
If you fail to request an extension by April 18, 2023, and forget to file your tax return, the IRS will subject you to a failure to file penalty.
The penalty amount is generally based on the amount of tax owed and the length of time the return is late.
The failure to file penalty is typically calculated as 5% of the unpaid taxes for each month (or part of a month) that the return is late. This penalty is up to a maximum of 25%. For example, if you owe $1,000 in taxes and your return is three months late, the penalty would be 5% x $1,000 x 3 months = $150. If your return is more than five months late, the fine would be $135 or 100% of the tax due, whichever is less.
In some cases, the IRS may waive the failure to file a penalty if you can show that you had a reasonable cause for not filing your return on time. For example, the IRS may waive the penalty if you cannot file your return due to a natural disaster or severe illness.
It's important to note that the failure to file penalty is separate from the failure to pay penalty, which is imposed for failing to pay taxes owed by the deadline. The failure to pay penalty is generally assessed at 0.5% of the unpaid taxes for each month (or part of a month) that the taxes are not paid, up to a maximum of 25%.
Suppose both the failure to file penalty and the failure to pay penalty is assessed for the same month. In that case, the failure to file penalty will be reduced by the penalty amount for that month. This will bring the late filing and payment total to 5% per month or a fraction thereof.
The deadline for filing your 2021 taxes without penalty was April 18, 2022. However, you should still file all outstanding tax returns to avoid hefty fines.
If you refuse to file your taxes after being warned of the penalties and interest, the IRS may establish a tax lien against your property or bring a civil or criminal case against you. The IRS's response will depend on the seriousness of your refusal.
The IRS may file your tax return on your behalf if you fail to do so voluntarily. However, the IRS will rely on the information it collects (such as your W-2 and 1099 forms) to calculate your refund, but you won't get any potential tax breaks.
This will ensure that you pay the most tax possible, any penalties for filing late or not paying your taxes, and any interest accrued.
When processing tax returns, the IRS strives to have most refunds issued back to taxpayers within a month. However, the process could take much longer if your return is incomplete or the IRS system flags it for any reason.
If you want your refund as quickly as possible, file electronically and select direct deposit as your refund method.
After submitting your return, you can check its progress on the IRS website. In addition to your personal identification numbers and filing status, you'll need to provide the precise refund amount to the dollar indicated on your return form.
The IRS has stated for 2023 that federal income tax brackets and basic deductions will be increased in response to rising inflation.
For tax returns submitted in 2024, the agency has raised the income limits for each category for the 2023 tax year.
Throughout tax season, you need to be mindful of potential scams. Be aware that the IRS will only contact you about your tax return or refund via a written notice sent in the mail. Any communication received via email, phone, or text should be reported to the local IRS office. As tax season approaches, it is essential to remain watchful and report any questionable activity to the Internal Revenue Service.
Filing your taxes before April 18 is vital to avoid financial consequences, receive credits and refunds, and reduce the stress of dealing with government paperwork. You can protect yourself and your finances by taking care of your taxes promptly.
However, filing your own taxes can take a lot of time, especially if you have a complex tax situation or are unfamiliar with the tax code. Hiring a tax professional can save you time and help ensure your tax return is completed accurately and efficiently.
Hiring a tax professional can provide peace of mind if you are concerned about the risk of being audited. Tax professionals are trained to prepare tax returns that are in compliance with the law and can help reduce the risk of an audit.
If you want to ensure that you're in good standing with the IRS, get in touch with the experts at Porte Brown. With the tax laws continually changing, it can be challenging to stay on top of them and remain compliant.
Work with Porte Brown’s skilled Chicago tax accountants to ensure your finances are in order. Contact us today to learn more about how we can help you.
Get in touch today and find out how we can help you meet your objectives.
