Freelance Tax Return on Extension? Keep away from IRS Penalties by Submitting by the October 15 Deadline!

Did you file an extension on your 2023 federal tax return? If that’s the case, the six-month grace interval to get your taxes filed with out extra failure to file and late cost penalties is quickly closing. In actual fact, October 15, 2024 is simply across the nook, so now’s the time to just be sure you do file your return by this date.

Doing so will take it off your to-do checklist and cut back your tax penalty burden if you have already got one to deal with. Many taxpayers, freelancers included, will not be clear about what an extension on their taxes actually means, and deal with it. To assist lower via the confusion, listed here are some info about what an extension in your freelance taxes means, and how one can navigate it successfully on your private and freelance taxes. 

An extension is just an settlement between you and the IRS that so long as you file on or earlier than the 6-month mark after the unique deadline, you’ll not be topic to failure-to-file penalties. 

In actuality, an extension will not be an extension on the tax cost you owed on the April unique submitting deadline. Your 2023 tax legal responsibility was due, in full, on April 15, 2024. Until. That’s, you took motion whenever you realized you couldn’t pay and submitted IRS Kind 4868 to increase your tax return.

Remember that in case you didn’t file an extension and also you didn’t make a cost together with your extension otherwise you paid after April 15, 2024, the IRS might assess a late-filing penalty of 5% per 30 days of the tax owed and a late cost penalty of 0.5% a month of the tax due. The utmost late submitting penalty is 25% and the late-payment penalty most is 25%.

Be certain that your tax information are full, present, and safe.

In case you are lacking data or want up to date or corrected types as a way to file your taxes, it’s crucial to make use of the following few weeks to get the data you want (the guidelines beneath can assist) so you may make the tax return extension deadline on October 15, 2024. All information should be saved for no less than three years after submitting your taxes, these embrace however will not be restricted to:

• W-2s or Kind 1099s, you’ll want to contact the issuing group and request the lacking paperwork. This additionally applies in case you obtained an incorrect W-2 or Kind 1099. If you don’t obtain the lacking or corrected type in time to file your tax return, you’ll be able to estimate the wages or funds made to you in addition to any taxes withheld. When you obtain the lacking or corrected Kind W-2 or Kind 1099-R after submitting your return and the data differs out of your earlier estimate, you need to file Kind 1040-X, Amended U.S. Particular person Earnings Tax Return.
• When you obtain an incorrect Kind 1099-G for unemployment advantages, you need to contact the issuing state company to request a revised Kind 1099-G. 

When you aren’t certain of an quantity or are nonetheless ready for paperwork, bear in mind, you will have three years from the due date or the date you filed to amend your tax return, when you’ve got a refund due. When you’ve got no refund due, you will have greater than three years to file an amended tax return, Kind 1040X, nonetheless, you’ll be topic to curiosity and penalties on the excellent steadiness. 

Did your state expertise a pure catastrophe this yr? You will have an computerized extension.

One other doubtlessly surprising submitting extension could also be legitimate on your freelance tax scenario in case you are in a federally declared catastrophe zone. If that is so (you’ll be able to look to see in case your state has any federal catastrophe zones recognized, it’s possible you’ll be eligible for this extension. The Federal Emergency Administration Administration has an inventory of this data at Disasters and Different Declarations | FEMA.gov.

Failure to file your tax return extension might impression your passport.

The IRS is critical about delinquent tax filers! When you’ve got important unpaid federal tax debt (together with assessed penalties and curiosity in your prolonged taxes) totaling greater than $62,000 (adjusted yearly for inflation) from obligations together with U.S. particular person revenue taxes, belief fund restoration penalties, enterprise taxes for which taxpayers are personally accountable for and different civil penalties, it’s possible you’ll be in danger for dropping your passport, too.

The IRS clearly states that when you’ve got this kind of critical tax debt, they need you to remain near the USA and can take excessive measures corresponding to garnishing your passport.

Take motion now and deal with your prolonged freelance tax return!

With the October 15 tax extension deadline only a few weeks away, don’t delay getting your prolonged freelance taxes filed now. The time you spend as we speak taking good care of this may mean you can cut back your final time, monetary, and stress associated to taxes so you’ll be able to deal with ending 2024 sturdy in your freelance enterprise and file your subsequent annual tax return away from any extra penalties or earlier freelance tax points.