Expecting a Tax Refund? Don’t Worry About Missing the Filing Deadline
Tax Day has come and it’s no surprise that today happens to be one of the busiest days of the tax season. But, if you are expecting to receive a tax refund this year, you don’t have to join the other procrastinating taxpayers who rushing in their tax returns.
It has been instilled in our heads that tax returns must be filed by April 15. Many people are unaware that this deadline doesn’t apply to taxpayers who are owed a refund. Understandably, the IRS is more concerned about collecting taxes that doling out refunds.
So, there is no rule that penalizes a taxpayer for filing their tax return after the deadline if the taxpayer is getting a refund.
However, it doesn’t mean that you should delay the filing of your tax returns — you won’t get that refund if you don’t file. Additionally, your refund is forfeited to the government if you don’t claim it within three years of the original filing due date. You have until April 15, 2021 to claim your refund for the 2020 tax year.
Penalties for being late
The penalty for missing the filing deadline and failing to pay on time is 5 percent of the owed taxes for each month past the deadline. If you file more than 60 days late, the minimum penalty is $135 or 100 percent of the owed taxes, whichever is smaller.
Even with a tax-filing extension, which pushes the filing deadline to Oct. 15, you’ll still have to pay at least 90 percent of the due taxes by today to avoid failure-to-pay penalties.
See if you’ll get a refund
To see if you’re going to get a refund (and if you can file after the deadline without a penalty), use one of the many free tax-refund calculators that are available from tax-preparation companies, such as those from TurboTax and H&R Block.
While these calculators will provide a general picture of your tax situation, you cannot be absolutely sure that you are getting a refund until you file your return.
If you can make it by the deadline, you have nothing to worry about.
The earlier that you receive your refund, the sooner you can put that money in a retirement account or savings account.
Simon Zhen is the senior research analyst for MyBankTracker. He is an expert on consumer banking products, bank innovations, and financial technology.
Simon has contributed and/or been quoted in major publications and outlets including Consumer Reports, American Banker, Yahoo Finance, U.S. News – World Report, The Huffington Post, Business Insider, Lifehacker, and AOL.com.