Traditionally, in the United States, you are supposed to file your federal income taxes by April 15. This year, the deadline to file is Tuesday, April 18.
You get three extra days because the US government doesn’t work weekends; also, there’s a legal holiday in the District of Columbia on the 16th called Emancipation Day that commemorates the end of slavery in the district in 1862. Since the 16th falls on a Sunday this year, the government observes Emancipation Day on Monday, the 17th.
Maine and Massachusetts residents also get an extra day to file federal taxes. Each has a Patriots’ Day holiday on Monday, so their deadlines extend to Wednesday, April 19. You also may earn an extension if you live in a place that has experienced a recent natural disaster.
Most state taxes are due on April 18 as well. Exceptions include Delaware (May 2), Virginia and Iowa (May 1), Louisiana (May 15), and Maine and Massachusetts (April 19, along with their federal taxes). If you live in Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, or Wyoming, you don’t have to worry about state income tax at all.
Gather Your Documentation
Most tax documents, such as W-2s and 1099s, should have been mailed to you with a postmark of Jan. 31, 2023, though there might be a few exceptions, including 1099-S and 1099-B forms.
Don’t file until you’re sure you’ve got all the forms you need. Lacking paperwork can put a bigger target on you for an audit. It also means more work later to file an amendment (Form 1040-X). You’ve got three years from the original filing date to file an amendment to get a refund. 1040-X is now available to file electronically via your favorite tax software, but only if you e-file your original return. Rather than file without the right papers, it’s better to file an extension (see below).
Worried about a missing W-2 or 1099? Take a look at your full IRS transcript—that’s a list of all the income and wage information that was reported for you over the year. You’ll find it on the IRS page called Get Your Tax Record. You’ll need to provide your Social Security number or Individual Tax Identification Number (ITIN), date of birth, filing status, and street address for an online transcript that’s suitable for printing.
Avoid the Scams
In 2015, there was a huge spike in refund theft—1.2 million fraudulent returns were filed, totaling $7.2 billion. The IRS and states ave cracked down on tax-refund fraud, so delaying refunds to verify IDs has become the norm, especially for those getting the Earned Income Tax Credit or Child Tax Credit. Fraudsters love these refundable tax credits, because even low-income filers could qualify. The other reason refunds can be late is low staffing at the IRS. Last year’s hiring of 5,000 new customer service agents will help.
The IRS will accept only one return per Social Security number, so filing early means beating fraudsters to the punch. Getting a rejection on an e-filed return this late in the season is the first sign your ID may be compromised. Fixing that issue can be a true hassle, starting with a fraud report. (To stay safe, use tax filing software, log in with a unique username and a strong password, then activate multi-factor authentication to lock it all down.)
The IRS fraud filters are stringent, catching even legit filers in their claws. In 2015, 40% of the 4.8 million flagged by the IRS as fraudulent were not. But by the end of 2018, fraud was down 72%, according to the IRS.
All of this means if it takes a while to get your refund, it may be for a good reason.
In 2018, there was something else to worry about: The IRS issued a warning about fraudsters who deposited tax returns to your account even if you didn’t file. Sounds great, but then, the bad guys tried to trick people into handing that money over to them. It was a phishing-fraud-social-engineering scheme, and it could still work. If you receive an erroneous refund, contact your bank and have them return the refund to the IRS, then call the IRS at 800-829-1040 for individuals, or 800-829-4933 for businesses, and explain what happened.
Here’s a look at the latest list of “Dirty Dozen” top tax scams from the IRS from 2022.
IRS Contact Preferences
The IRS has rules about contacting citizens, starting with this: The IRS will never call you to demand immediate payment. It certainly won’t ask for a credit or debit card number over the phone. It would never ask for a gift card or wire transfer. Its first point of contact is snail mail.
Just to reiterate: The IRS always prefers postal mail. If you get an email from the IRS, it is 100% a scam. Especially if it has an attachment. Forward those emails to [email protected] or call the numbers above.
Sometimes, rarely, the IRS might call you. If you get a suspicious call, report it on the Treasury Inspector General’s Report a Crime form, or call 800-366-4484. (You can also use that number to report IRS employees who mistreat you.) Curious about what a scam call sounds like? Listen to a sample IRS phone scam call recording.
Hassle-Free Filing via Software
Filing your taxes doesn’t need to be a hassle. Today’s tax-prep software painlessly takes you through the steps to file a clean, correct return. The software saves your work as you go; you can start before you get all your tax documents and go back in later.
E-filing—using software on your PC or phone—is the way to go. (If you don’t believe me, read How to Get the Largest Tax Refund PossibleHow to Get the Largest Tax Refund Possible.) Perhaps best of all, nine out of 10 e-filers receive refunds within 21 days, as opposed to six weeks for paper filers. Even the IRS prefers it. The College Investor created this chart to show how long the wait should be for a refund, depending on when you file.
There are both big and small names in online tax preparation software, but this year, Intuit TurboTax 2023 and H&R Block 2023 both take home PCMag’s Editors’ Choice awards.
These services range in price from free versions for federal filing to premium packages that include state filing and advanced scenarios (such as having a home business). Each offers a variety of ways to claim refunds, recommendations to avoid an audit, and some form of an accuracy guarantee.
If you prefer to file on your phone, check out the Best Mobile Tax Apps, where both TurboTax and H&R Block earn Editors’ Choice awards again. If you’re a freelancer, especially working in the gig economy ruled by apps, be sure to read When Side Hustle Meets Schedule C: What Gig Workers Should Know About Taxes.
In some tax scenarios, you can even e-file for free. The options above will charge you, but there are other ways. For specifics and to see if you qualify, read E-Filing Your Taxes for Free: Are You Eligible?
Extensions, Penalties, and When to Pay
When you know you’re owed a federal refund, you are “allowed” to file late, even after April 18. In fact, the government would appreciate it if citizens getting a refund did file late. It likes to hold onto money. If you wait too long—three years—your refund becomes government property.
This does not apply to states, however. You must file state taxes on time, whether you’re paying or not.
For those who fear electronic filing, a number of USPS offices will likely be open until midnight on Tuesday, April 18—and your mailing must have an 11:59:59 p.m. postmark or earlier, or you’re late. Use the USPS.com Locations tool to find the office nearest to you that will be open, but call to make sure.
If you don’t file by April 18 (not even an extension), but you owe money, the monetary penalties are 5% of any unpaid taxes owed for each month you don’t file, up to 25% of the total owed. On top of that, you have to deal with the IRS, which is punishment enough. That’s just for filing late.
Strangely, the penalty for Failure to File is worse than the penalty for Failure to Pay, which is 0.5% per month. If you owe $1,000, but file three months late, you’ll have to pay $1,150. But if you file and don’t pay, you owe only $1,015 after three months. If you go over 60 days, the minimum you pay is $100 or 100% of the return, whichever is less. (The IRS also charges interest on penalties, naturally.)
There’s no statute of limitations on lateness—the IRS will come after what you owe even 80 years later, if you live that long. The lesson here is to file even if you can’t pay what you owe.
It’s better to file for an extension. Form 4868 (“Application for Automatic Extension of Time to File U.S. Individual Income Tax Return”) is part of your e-filing tax software. An extension also must be filed by April 18, just like a standard tax return. Doing so gives you an extra six months to do the federal paperwork, until October 16, 2023. For states, the date varies.
There’s one problem. If you owe money, an extension doesn’t mean you get to pay later. If you don’t file your taxes until October, you may find you already owe six months’ worth of penalties. In extreme cases, if you meet a lot of legal requirements, you can apply for an Extension of Time for Payment of Tax due to hardship. We also have great advice on how to get help if you owe more money at tax time than you currently have on hand; read What to Do If You Can’t Pay Your Income Taxes.
Remember, you have the right to appeal to the IRS before you pay a single dime. It’s all part of the Tax Payer Bill of Rights.
Deductions, if Possible
There’s a chance you’re among the hundreds of thousands of US citizens this year who don’t bother itemizing any deductions. That’s because the standard deduction for most people was increased so much in 2017 that itemizing deductions doesn’t always seem worth the hassle. You’ll be just as likely, if not more, to get a federal refund without doing the extra work. The standard deduction will be higher for about 90% of people, depending on their filing status. This season, the standard deduction is $12,950 for people single or married filing separately, $25,900 for married filing jointly, or $19,400 for a head of household. It’s even higher for those over age 65 or blind (add $1,400) or age 65+ and blind (double the standard).
A lot of itemizable deductions went away under the so-called Tax Cuts and Jobs Act in 2019. There are no more deductions for personal exemptions, SALT deductions, moving expenses, work expenses (until 2025), or even most tax-preparation fees. But an individual can deduct an extra $300 for cash donations to charity.
Just because many deductions don’t apply to the federal filing doesn’t mean you can’t see some benefit with your state return, though.
If you’re still claiming deductions no matter what, here are a few you can sandwich in at the last minute, even if 2022 is long over. Until April 18, 2023, you can contribute to a traditional or Roth IRA and deduct the amount from your income for 2022. Contribute up to $6,500 or $7,500 if you’re over 50. That can save you $2,200 in taxes.
You can still contribute to a Simplified Employee Pension IRA (SEP-IRA) and/or Health Savings Account (HSA) for the 2023 calendar year. For the SEP-IRA, the limit is $66,000 or 25% of your compensation, whichever comes first. For the HSA, don’t go over the maximum contribution of $3,850 for individuals or $7,750 for families. You can add $1,000 if you’re over age 55 by the end of the year.
Need to find more deductions? Try these:
- Are you a volunteer? You can’t deduct your time or personal expenses (say, lunch while you’re helping), but you can claim up to 14 cents per mile driven in your own car while traveling for voluntary acts for a nonprofit. Parking and tolls, too. (That’s right: You can claim mileage for volunteering but not for actual work.)
- If you’re in the armed forces and have to relocate due to a change of station (under orders), you can claim 17 cents per mile driven for moving purposes.
- If you paid directly for glasses or contacts, examinations at any doctor, co-pays at the office, teeth cleanings, hospital visits, ambulance bills, and so on in the calendar year 2022—and those medical expenses add up to more than 7.5% of your adjusted gross income (AGI)—you’ve got a major deduction on your hands. It may take a lot to get to 7.5%, but one year with a serious illness can add up quickly.
- If you did any kind of home improvement for medical reasons—like installing a wheelchair ramp—that’s deductible, but again it must fall within that 7.5% above, with all the other medical expenses.
- Medical-based mileage is also worth a deduction of 22 cents per mile.
- Paying some tuition? The American Opportunity Tax CreditCredit is $2,500 per student (give or take). It can cover more than tuition.
Know Your IP PIN (if Necessary!)
For a select group of citizens—mainly, those who may have a compromised Social Security number—the IRS assigns a six-digit Identity Protection personal identification number (IP PIN). It’s another extra-governmental identifier that might make privacy advocates apoplectic but helps the IRS in its constant battle against fraud.
Including it provides government accountants extra assurance that you are you. If you ever got one of these numbers, even as part of a pilot program, it’s required for all future tax returns. If you can’t find your IP PIN (it comes on a CP01A notice; you’ll get a new one every year), go to the Get An Identity Protection PIN (IP PIN) page to retrieve it. If you’ve never received an IP PIN in your life and don’t mind the government having another number to ID you, you can opt in.
This system utilizes the same ID.me system that was once going to require facial recognition, but the IRS no longer requires that. Eventually, the IRS plans to switch over to a Login.gov authentication tool requirement, the same ID system used by the Department of Veterans Affairs and the Social Security Administration. It may be active soon.
Don’t Sweat the Audits
A lot of people get stressed about an audit. That’s when the IRS comes in and goes over your records to make sure you’re not a big ol’ tax liar. Tax prep software like TurboTax will provide a rundown of why it believes you’re at risk of an audit (or not). Audits have declined almost every year since 2010; there was a small upturn in 2019 but it’s still less than 1% of returns.
That’s because of staffing. The IRS lost 21,000+ employees between 2010 and 2019 because its budget was cut by 20.4%. As noted above, there’s been a lot of hiring lately, but the IRS has a lot of returns in the backlog to deal with first.
Filers who make over $10 million a year are statistically more likely to get inspected, no matter what—6.66% percent of returns on such high-income households get screened.
There might be some random audits, but if you’ve never been audited before, it’s unlikely to happen now if you don’t throw any red flags in your filing. Don’t stand out. The IRS is using algorithms just like everyone else to see who in your income bracket is unique. Unique gets noticed and noticed gets checked.
Among the red flags you should avoid:
- Unusually large charitable deductions (such as claiming you gave half your income away)
- Claiming a hobby is a business that always loses money
- Having a business that’s always reporting losses
- Owning off-shore accounts
- Publicly protesting paying taxes (then not paying)
- Making a lot of math errors in your returns
- Amending your taxes a lot
- Filing for a lot less than what was reported on your W-2 (don’t use your final paycheck to calculate your income for taxes; that’s an automatic audit, people)
Most audits don’t require a big meeting with the IRS in dark meeting rooms in dingy offices as if you’re in the cast of Everything, Everywhere, All At Once; 70% of audits happen via mail when the IRS requests extra records. The average amount owed on such an audit is around $7,000, according to H&R Block. If auditors do come to your office or home, or you go to the IRS office, the average shoots up to $65,000.
It’s worth noting that research shows the IRS audits the poor (those who earn the Anti-Poverty Earned Income Tax Credit) at about five times the rate of everyone else; at least it did in 2021.
At least one accountant claims a good way to avoid audits is to always file for an extension and submit tax paperwork in the height of summer, because auditors like to vacation, too. The AI that’ll be checking all our returns in the coming years probably won’t fall for that, but you can try it in 2023.
For more tax coverage, see 7 Ways to Start Minimizing Next Year’s Taxes Now.