Filing taxes is something that millions of Americans are required to do by order of the Federal Government every single year. For those earning above the 12,000+ dollar threshold (this changes every year) or who fit any of the other requirements, knowing exactly when to do it in the first place is very often half the battle. So exactly when do taxes need to be filed? We’ll answer this question and other tax-related questions below.
- What exactly is a tax return?
- Standardized dates
- Overseas citizens
- What happens if you’re late?
- Why tax returns are so important
- How your tax return changes
What exactly is a tax return?
A good place to start with learning the ins and outs of filing tax returns and how to correctly use them in your financial life is by developing your knowledge of what they are. A tax return is essentially a document that is to be filled in annually and sent to the IRS. The purpose of the tax return is to inform the IRS of your annual taxable income, allowing them and yourself to update your financial records and pay any taxes you’re legally required to do so. They also mean that if you’ve overpaid your taxes, you’re also able to reclaim them back, and you’re able to identify your overall household income, tax allowances, and other such necessary information as well.
As stated, taxes need to be filed on an annual basis. This goes without question, as the tax filing system is most practically based around the finances of a calendar year. Typically, the answer to when taxes need to be filed is April 15th. This is generally kept the same on an annual basis to make things routine and regular in a standardized process.
That isn’t to say, however, that you must file your taxes exactly on April 15th. April 15th is the deadline for submitting a tax return in any normal financial year, as will be discussed below. The earliest that you can file your taxes for the previous year is actually around the end of July. There is no set date for when that may be looking through the last few years, but it usually falls somewhere between January 26th and January 30th. The earlier you file your taxes, the quicker you’ll receive a response, so it’s always a good thing to note and get them done early.
It should be noted that this April deadline date did change in line with the global COVID-19 pandemic, at which point it was granted a 3 month extension period, making the deadline July 15th. It’s highly unlikely that this will become the new normal due to the common date being as close to the previous year as possible, but it’s something that’s worth remembering.
For American citizens residing overseas or on military duty outside of the US, the due date when you need to file your tax return may be different. On the regular date of sending, these taxpayers, who were required to file their taxes, are granted an automatic 2-month extension without request.
Even this can be extended with a request, however, taking the due date to October 15th, but this does entirely depend on your unique situation and the decisions of the federal government. All taxes paid will need to be in U.S dollars, and this also applied to Green Card holders.
What happens if you’re late?
If you’re late with filing your tax return, then various penalties occur that are enforced by the IRA. This generally comes in the form of a 5% interest charge on your tax debt for that year for every month you do not file, which can become a maximum of a 25% additional penalty.
On top of this penalty, if you continue not to file your taxes or pay for them, the IRA may pose further, much more serious sanctions as well. This can be anything from property seizure and asset repossession right through to legal evasion charges and passports being withheld.
Why tax returns are so important
On top of the fees that come alongside not filing your tax return correctly, even if you weren’t sure when to do so, there are more reasons that tax returns are so important. Not only do they make sure that your financial data is legally where it needs to be and in the control of the necessary governing bodies, but they also mean that you’re paying your due diligence.
They also help you to identify which parts of your income come together to make up taxable and nontaxable monies, which in turn helps you to learn more about your overall financial situation, and any mistakes you may be making or help that you’re able to seek out at the same time.
How your tax return changes
As your life changes, so do the things that contribute to your taxable income, in addition to your overall income. Various factors and situations in life such as your marital status, financial dependents, employment status, level of state support, and even things like age all come into play to determine what you need to declare and how much of it is required to be paid as tax.
Filing your taxes really is the only way to master your finances at a safe and governmentally required level that will save you a huge amount of time, stress, and quite probably money at some point down the line as well.