INDIANAPOLIS — The Internal Revenue Service (IRS) is reminding millions of Americans who filed 2020 tax extensions — your deadline is fast approaching.
"Oct. 15 is the deadline for just about everyone," said IRS spokesperson Stacy Engle. "Only members of the military and others serving in a combat zone, have more time. They normally have 180 days after they leave the combat zone to file and pay any taxes due."
Engle said an estimated 188,400 Indiana residents asked for an extension to file their 2020 tax return.
Experts say to beat that Oct. 15 due date, you should file electronically.
"You don't want to just drop it in the mail first class and hope it gets to the IRS because if for some reason, with all the issues they've been having with processing, if it gets lost, it's just going to be a mess to get cleaned up," said Michael Jamison, a certified public accountant and owner of OnTarget CPA in Indianapolis.
Jamison said if you must mail your tax returns, send them via certified mail. He said missing the deadline could have an impact on your finances.
"All filing late is going to do is delay you getting that refund, but in the case of owing money, there's going to be a penalty for failure to file based on the amount you owe," Jamison said.
According to the IRS, the failure-to-file penalty is 5% of the unpaid taxes for each month, or part of a month, that a tax return is late.
Interest accrues on the unpaid balance and compounds daily from the due date of the return until you pay the balance in full.
So, what do you do if you didn't receive an economic stimulus check?
"My best advice would be, get that 2020 filed so then you have the best chance of getting that $1,400 per person payment sooner rather than later," Jamison said.
If you didn't receive it and your income is below the thresholds for 2021 when you file your taxes, you can claim that as a "Recovery Rebate Credit."
The same goes for advanced child tax credit payments.
"If you do not get the entire amount you were supposed to get, you'll be able to claim the remainder when you get your tax return for 2021, so it's not like the money is lost. It's just going to be delayed a little while," Jamison said.
Then there's the impact of the pandemic that left many Hoosiers unemployed.
"It's very important you report that unemployment on your tax return. For federal purposes there is a certain amount that is exempt from taxation, but like I said it does need to be reported. It will prevent you from getting notices down the road and having balances due," said Jamison.
For more information, visit www.irs.gov.