How to File for Tax Return Delays if You Can’t Meet the IRS Deadline

Picture this—you have less than three weeks to file and submit your tax return, but you’re too busy to find the time to do it. Your anxiety and stress levels increase as the tax deadline gets closer. What should you do? 

First, relax and know that you are not the only one experiencing this problem. More importantly, remember that there are ways to deal with late tax filings!

Now that you’ve calmed down, let’s tackle this together. Below, we’ve gathered the most practical solutions and tips on tax return delays so that you can prevent yourself from paying a lot of money for penalties. 

File for a tax return delay (tax extension)

If you know for sure that you won’t be able to make it by the due date, immediately file for a tax extension to avoid any possible penalties. All you need to do is fill in and submit Form 4868 to the IRS either by paper or electronically. 

However, there’s a catch. Filing an extension for tax return delays only allows you more time to file, not more time to pay your tax. In other words, if you owe money to the IRS, you have to estimate and pay at least 90% of your tax liability with your Form 4868. Otherwise, you could face a late-payment penalty. 

When is the deadline to file a tax return delay? 

The deadline to file a tax extension is the same date to file a tax return, which is April 18, 2022. An extension will delay your filing deadline to October 17, 2022. 

What happens if I don’t file a tax return delay? 

This depends on whether you owe money to the IRS or the IRS owes you money. 

  • If you have taxes to pay:

You’ll be fined 4.5-5% per month of the tax amount owed plus interest. The maximum penalty can be up to 25%. 

It’s important to remember that the penalties for failing to file a tax return or requesting a tax extension are more severe than the penalties for not paying your taxes on time (0.5%/month of the tax amount owed plus interest.)

  • If you have a refund:

You won’t suffer from penalties for not filing your tax return by the deadline, even if you don’t submit an extension. However, it might be different for state taxes. 

That being said, you still should get your taxes filed and dealt with on time. This is mainly because you must file a tax return to get your money back. 

How can I know if my tax extension is approved? 

Normally, you will receive an email from the IRS confirming within a day after you e-filed Form 4686. If you sent the tax extension request by post, you won’t receive a confirmation email and will have to call the IRS to check. Otherwise, you can just wait and see — silence means no issues most of the time. The IRS only contacts you if there’s something wrong with your extension. 

Why might my request for tax return delays be rejected? 

Though this situation doesn’t happen too often, there’s still a possibility if you don’t file Form 4686 carefully. For example, if you made spelling mistakes or provided information that doesn’t match IRS records, your request might be turned down. In this case, the IRS will normally give you a few days to correct the errors and resubmit the form. 

Another thing that could lead to rejection is unrealistic tax liability estimates. Not only will you not get an extension, but you might even be fined. 

Can I request a tax payment delay? 

Technically, yes. However, the requirements are very strict. Below is what you need to do in order to have some extra time to pay your income tax: 

  • File Form 1127 and submit it to the IRS on or before the date that the tax is due
  • Provide a complete statement of all your assets and liabilities as of the end of the last month, plus an itemized list of money you received and spent in the three months preceding submitting your request for an extension to pay.
  • Show that paying the tax by the original deadline would cause you extreme hardship (e.g., if you show it only causes inconvenience to you, there’s little chance your request will be accepted)
  • Prove that paying the tax on time would result in a significant financial loss and that you don’t have the money or can’t raise it by selling property or borrowing.

Generally, you will get a six-month extension if your request is approved. Furthermore, the IRS requires some acceptable security before issuing a payment extension. Depending on your circumstance, the security could be in the form of a bond, a notice of lien, or even a mortgage.

Extensions are sometimes granted, particularly in the event of federally declared disasters. 

Additional relief information is available on the IRS Disaster Relief page.

The bottom line 

Filing tax isn’t fun, but there are ways to make the process easier. 

Always try to file your tax return as soon as possible. In case you can’t, try to make a request for tax return delays. Remember that it will only give you more time to file your tax return, not more time to pay your taxes. 

Tax season can be very complex if you’re a business owner. Since most business-related expenses are deductible, you should go over your bookkeeping carefully to make sure you can lower your taxable income as much as possible. Having your receipts available and ready to check will put you at a significant advantage in this case.  

Shoeboxed can help you with that. 

Shoeboxed is an online application that helps you clear your piles of documents and digitize them in just a click. This app automatically extracts and categorizes important data from your receipts, which then get approved by a team of data experts. You can scan your business receipts, manage expenses, store business cards, and track business mileage easily, helping you boost productivity and bring in more revenue. 

Quick, reliable, and trustworthy, Shoeboxed guarantees to organize your receipts in the best way possible! 
Try Shoeboxed right now and get  25% off all plans!

Your Complete Guide to the U.S. Tax Return Definition

Tax is the money paid by citizens and businesses to the government so that they can make roads, build and maintain public parks, fund the army, provide policing, offer schooling and education, and more. 

Have you ever wondered how the U.S. government decides how much tax each individual must pay? The government’s staff don’t go knocking at everyone’s door to examine our finances and then calculate our tax duty. No, in fact, we do the job ourselves — through a tax return. 

So, what is a tax return, exactly?

This article will introduce you to the tax return definition, give an overview of its three main sections, and answer the most frequently asked questions about this financial matter. 

Tax return definition 

A tax return, also known as a tax report, is a form or a set of forms issued by the government which you fill in to report your income, expenses, and other financial information. When you complete your tax return, you’ll know if you owe any money to the government and how much to pay. In the case that you overpaid your taxes, you can also request a refund by filing the tax return. 

The tax return form for individuals for United States federal taxes is Form 1040, whereas Form 1120 is for corporations, and Form 1065 is for partnerships.

See also: What Is Tax Season And How To Prepare For Your 2022 Tax Return

The three main sections of a tax return 

Typically, a tax return consists of the following three sections: 

Income 

The income section lists all your income sources, such as wages, salaries, dividends, self-employment income, and royalties. If you’re an employee, your income will be recorded in a W-2 form provided by your employer. 

Deductions 

Deductions, also known as tax write-offs, lower your tax liability, which essentially means the more deductions you claim on your tax return, the less tax you’ll have to pay. Just be aware and make sure you only claim deductions that you’re eligible for. 

Some typical deductions for individuals that you may be able to claim are interest paid on your mortgage or your student loans, charitable donations, and contributions to your retirement saving plans. For business owners, you can claim tax deductions for most expenses involved in business operations. 

Taxpayers can either take a standard deduction or itemized deductions. For those who opt for the former method, the standard deduction for the tax year 2022 is $12,950 for single filers, $25,900 for joint filers, and $19,400 for heads of households. The deduction amount may increase slightly each year to keep up with inflation. On the other hand, if you use itemized deductions for your tax return, you choose from various individual tax deductions rather than taking a fixed deduction amount. 

Tax credits  

Many people get confused between tax deductions and tax credits, so here is the key difference: deductions are subtracted from your taxable income while credits are subtracted directly from your total tax bill. For example, a tax credit of $1,000 will result in a $1,000 reduction in your tax bill. On the other hand, a $1,000 tax deduction lowers your taxable income (the amount of money you have to pay taxes on) by $1,000. So, if you are in the 22% tax bracket, a $1,000 deduction would save you $220.

Tax credits cover a wide range of expenses and situations: you can get tax credits if you purchase solar panels for use in your home, or for child-dependent care and education credits, etc.

See more: How To File Taxes For The First Time: A Complete Guide To All Your Questions.

Who has to file a tax return? 

While most U.S. citizens and permanent residents who work in the United States need to file a tax return — not everyone must do it. Whether you have to file a tax return depends on your age, filing status, income level, and source of money.

To find out if you need to file a tax return this year, check out this detailed guideline from the IRS (Internal Revenue Service): Publication 501 (2021), Dependents, Standard Deduction, and Filing Information

What happens if I make a mistake on my tax return? 

If you filed your tax return incorrectly or failed to include something, you need to notify the IRS. To do so, you would need to file an amended return with the IRS using Form 1040-X. You can file it yourself or have a professional prepare it for you. If you don’t inform the IRS of these mistakes yourself, you could face financial penalties and pay interest. 

How can I track my refund? 

You can use the IRS Where’s My Refund? tool or call the IRS directly at 800-829-1954 to check on the status of your refund 24 hours after you e-file. The IRS will give you an exact refund date once your tax return and refund are approved.

You’ll likely receive your refunds in less than 21 days.

Final thoughts 

Understanding the definition of “tax return” and how it’s calculated will help you become more confident in dealing with this important financial process. As a result, you’ll gradually learn how to file your tax return quicker and more accurately. 

A great tip for everyone who wants to streamline their tax return filing process is to have your receipts organized. Receipts help you record transactions correctly and serve as concrete evidence for your deduction claims. It might be too much of a task to do yourself — and that’s where Shoeboxed comes in. 

Shoeboxed is a well-trusted tool to help businesses, freelancers, and DIY accountants store and organize their receipts. It quickly scans and digitizes your receipts and documents, then automatically extracts, categorizes, and human-verifies important data from your receipts. On top of that, Shoeboxed also helps you manage expenses, store business cards, and track business mileage easily, helping you boost productivity and bring in more revenue. 
Go paperless with Shoeboxed for FREE today!

Finding the Best Tax Solution for Small Businesses in 2022

The 2022 tax season has the potential to bring a lot of headaches for many business owners. If you’d like to file your taxes yourself, maximize your tax refund as much as possible, and get it promptly, then choosing the right tax solution will save you a lot of time and hassle. 

This article will list the best five popular online tax preparation software in 2022 and their specific features to help you choose the right one. As a bonus, we’ll also give some general tax tips near the end of this article.

TurboTax – Best tax solution for ease of use

When it comes to the easiest tax solution, TurboTax is the clear front-runner for a good reason. This software combines tax expertise and an easy user experience, enabling self-employed individuals and sole proprietors to file their taxes with as many deductions as possible. 

TurboTax is very easy to use as it walks you step by step through the filing process. During this process, this app collects your financial situation by asking you a series of interview-style questions. The questions are written in plain English and follow an interview format. After that, the software fills out the appropriate tax forms based on your answers. Moreover, the TurboTax Live feature offers the help of a tax professional, which further enhances the company’s software solutions. 

TurboTax‘s outstanding features include free audit support and free multi-year storage. That means if you use the software year after year, your past returns are saved on the site, saving you time and effort. The software also offers extra features, tools, and calculators specifically designed for self-employed filers and those with more complex tax returns. Self-employed filers, for example, receive a free one-year subscription to QuickBooks Self-Employed. You can even store your receipts and track business mileage throughout the year to maximize your business deductions.

While TurboTax brings a user-friendly interface and numerous feature options, its price is quite a bit higher than other competitors. The Deluxe option costs $59 for your federal return and an additional $50 for each state return. There is, however, a free option for tax-filers with simple tax situations. Though TurboTax‘s paid version may cost more than other tax software, the peace of mind you’ll have could be worth the extra expense. 

Base price: From $59. 

Available on: iOS, Android, and website

TaxSlayer – Best budget tax solution

TaxSlayer is definitely the No.1 option for best budget software. This app offers no-frills tax preparation at reasonable rates, and its full-featured software will entice filers on a tight budget. TaxSlayer, similar to most popular tax preparation software, walks tax-filers through their returns with a question-and-answer format. Some other outstanding features of TaxSlayer are free multi-year storage and reimbursement for penalty or interest charges. 

It offers four service levels, from Simply Free, Classic, Premium, and Self-Employed, ranging from $0 to $48. The free version also lets you file a simple tax return, much like TurboTax, while the Classic filing option gives you access to all major tax forms. 

Unlike most other filing software, TaxSlayer doesn’t require upgrading to access certain forms. If you purchase the premium version, it just offers more features, such as audit assistance and a guide to self-employed taxes.

Base price: From $17.95. 

Available on: iOS, Android, and website

H&R Block – Best tax software for in-person filing

H&R Block is a tax solution specially designed for small business owners. It guides users in preparing and filing partnership and LLC returns (Form 1065), as well as produces payroll forms for the IRS (Forms 940 and 941) and employer forms for employees (Forms W-2 and 1099). The software also lets businesses maximize tax benefits from business expenses, vehicle deductions, equipment, and asset depreciation. H&R Block offers free, unlimited state program downloads and business e-filing, as well as federal and state forms. H&R Block also guarantees 100 percent accuracy, offers audit support, and provides free advice from H&R Block tax experts. 

In addition to using H&R Block‘s software to file your taxes, the company provides three full-service tax preparation programs. First, you have two options for tax prep performed at an H&R Block office. The first one is an in-person tax-prep service, in which you sit with a tax professional in a local office (or at home on a computer) while your return is being prepared. The second option is a drop-off service, in which you leave your tax papers at the office and come back to sign the final paperwork, where everything is calculated on the correct forms. The price for both scenarios  starts at $80 for basic returns, plus an extra charge per state.

H&R Block‘s newest option lets you upload all of your forms for a completely virtual tax preparation experience. This means you receive the full service of an H&R Block representative without having to walk into a physical office. The combination of many locations and multiple tax preparation options at a reasonable price makes it our best overall pick.

Base price: From $49.99. 

Available on: iOS, Android, and website

Cash App Taxes – Best free tax solution

If your business’s goal is to save banknotes, consider using Cash App Taxes. Cash App Taxes, previously known as Credit Karma Tax, makes its debut with a completely free tax preparation solution that includes all accessible IRS forms and schedules. It offers users one federal and one state tax return, entirely free, with maximum accuracy and refund guarantees. Cash App Taxes comes with a simple interface and an interview-style process that quickly collects data about your tax situation and then populates IRS forms.

However, this app lacks a file importing feature, which means you’ll need to enter your information manually. Cash App Taxes also has several limitations that may exclude some tax-filers: No multiple state filings, no foreign income, no married filing separately option in community property states like California or Texas. It also lacks professional tax support, so we recommend Cash App Taxes to tax filers confident in handling their own taxes, having a few forms, and relatively simple tax situations. 

Base price: Free. 

Available on: iOS, Android, and website

Bonus: Shoeboxed – the painless tax filing preparation for freelancers and small businesses

The Shoeboxed app is exclusively designed for freelancers and small businesses who would like to have their expense reports “audit-ready.” Shoeboxed assists users in tax filing by quickly and efficiently digitizing your receipts and documents. Our OCR engine automatically extracts and categorizes important data from your receipts, then storing them securely in the cloud. From there, you can create and export clear, comprehensive, and accurate financial reports from your paper receipts. 

What if you’re too busy to scan your receipts? You can always mail them to a Shoeboxed facility to have them scanned and organized. 

Most importantly, scanned documents from Shoeboxed are human-verified data and approved by both the Internal Revenue Service and the Canada Revenue Service in the event of an audit. Shoeboxed helps you get your records clearly organized and well stored, making sure you don’t have to pay any more tax than necessary. 

Shoeboxed integrates with numerous accounting programs, like Quickbooks, Xero, Wave Accounting, FreshBooks, and so much more. This means no more manual entry required, no more missing receipts, and no more wasting time preparing for tax season. What’s more, Shoeboxed offers a mileage tracking and business card storing feature, making it a one-touch app to access all your important information. 

Tips for an easy tax preparation

Here are some helpful tips for lowering taxes, saving time and money, and avoiding tax penalties:

  • If you have self-employment income, itemized deductions, investments, or other complicated tax situations, you can consider seeking tax planning assistance from a qualified financial expert to help ensure your tax efficiency. The additional expenses you’re paying could result in a higher return, making the upfront expense a wise investment. However, it depends a lot on your individual filing situation, your withholdings, and your tax bracket.
  • Set a deadline to gather all your financial documents, such as your W-2 forms, 1099-s forms, information of your investment income, last year’s tax refund, student loan interest, and other items listed on the IRS Tax Form checklist. Breaking the intimidating task of the filing process into smaller parts saves you from a last-minute marathon session to meet the filing deadline. You can also check Shoeboxed’s guide to file taxes for the first time
  • If possible, try to digitize all your important information into Shoeboxed’s well-organized system. This will help clear your desks and drawers from piles of papers and enables you to access your data from anywhere, at any time. 
  • Learn about tax write-offs. Understanding what you can and can’t deduct from your taxes helps you better control how taxes impact your situation and maximize your tax return.

The bottom line

Choosing the best tax solution depends on the needs of your company. Whether you’re looking for a program that offers all the Schedule forms, or one with the simplest interface, there are many choices available. By comparing each software’s features and pricing with your business’s needs, you’ll be able to decide which one is the best tax solution for your business. Keep in mind that the more complicated your tax situation, the more likely you’ll need a premium plan. Otherwise, the basic or free plan can work for you. 

Sign up for Shoeboxed today to start your 30-day trial and see how this app can benefit you in all sorts of practical situations! 

Don’t forget to subscribe to the Shoeboxed blog for more useful tax information, success stories, DIY accounting, together with the latest Shoeboxed product update.