With time running out, here are some tax tips for last-minute filers

Still haven’t filed your taxes?

With less than 24 hours until the April 15 tax deadline, time is running out to file your 2024 federal tax return or request an extension. It also may be your last chance to claim a refund on a prior year’s return. 

Nearly one-third of Americans admit they procrastinate when it comes to filing their taxes, according to a survey of more than 1,000 U.S. tax filers from IPX1031, an investment property exchange service. The survey also found that about 25% do not feel prepared to file their taxes.  

“Procrastination is a natural response when something feels overwhelming,” said certified financial therapist Erika Wasserman, CEO of Your Financial Therapist. “But delaying important tasks like filing taxes only compounds stress.”

Meanwhile, some people may also assume that given staffing cuts at the Internal Revenue Service, taxpayers should wait to file and pay or not pay at all. Think twice before heeding that advice, experts warn. 

“Beyond the fact that filing and paying is the law, a lot of the agency’s compliance activities are actually pretty routine, such as matching W-2s and 1099s against what’s reported on tax returns, generating tax assessments, and assessing various late-filing, late-payment, and estimated tax penalties,” explained IRS spokesman Eric Smith in an email to CNBC.

Most taxpayers, however, have already filed their federal tax returns.

As of April 4, the IRS received roughly 101 million individual returns of the 160 million expected this filing season, the agency’s latest report shows. Nearly 68 million refunds have been issued, with the average refund amount of $3,116, about 3.5% more than a year ago.

For most taxpayers, the federal tax deadline is April 15. If you’re missing tax forms or need more time, you can file a tax extension by April 15, which pushes the federal filing deadline to Oct. 15.  However, you still must pay your taxes by the original due date to avoid racking up penalties and interest.

Choosing “extension” when making a payment electronically on the IRS website for 2024 will automatically submit Form 4868, the document needed to request an extension.

“With all the check theft and check-washing schemes going on right now, e-pay is a great option, plus you get the peace of mind of knowing, right away, that the IRS got your payment,” Smith said.

(Check washing is a form of check fraud where thieves steal checks, erase the original payee and amount, and then rewrite the check for their own benefit.)

Payment options, including IRS Direct Pay, are available at IRS.gov/payments. 

You can also mail the extension Form 4868 by April 15 and include a check for what you owe, but processing times may be longer.

If you cannot pay your tax balance by April 15, you still need to file your return to avoid a higher IRS penalty, experts say.  

The failure-to-file penalty is 5% of unpaid taxes per month or partial month, capped at 25%. Meanwhile, the failure-to-pay penalty is 0.5% of taxes owed per month, limited to 25%. Both penalties incur interest, which is currently 7% for individuals.

Many disaster-area taxpayers will automatically have more time to file and pay, and they don’t even need to ask for the extra time. 

Alabama, Florida, Georgia, North Carolina and South Carolina, and parts of Alaska, New Mexico, Tennessee and Virginia have until May 1 to file and pay. Due to the wildfires, Los Angeles County has until Oct. 15 to file and pay. Kentucky and parts of West Virginia have until Nov. 3 to file and pay. 

Taxpayers can find details at IRS.gov/disasterrelief. 

If you have an unclaimed refund for tax year 2021, the IRS says you must file for it now before the three-year time window runs out on April 15. 

“For many, it’s more important than ever to do this because, in part due to the pandemic, a number of tax benefits were expanded for tax year 2021, including the stimulus-related Recovery Rebate Credit, the Child Tax Credit, the Credit for Child and Dependent Care Expenses and the Earned Income Tax Credit,” Smith said.

“Most of the expanded benefits were refundable, making them especially lucrative for low-and moderate-income individuals and families.”

If you’re unsure if you received the money, there’s a simple way to check via your IRS account online, tax experts say.

The 2021 stimulus payments were worth up to $1,400 per individual, or $2,800 per married couple. A family of four could receive up to $5,600 with two eligible dependents.

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