Did you run short of time last April when the regular tax filing deadline came? Hopefully, it was a rare occurrence and you took the smart step of filing an extension for your 2021 taxes. If so, the six-month window to get your taxes filed without additional failure to file and late payment penalties is rapidly closing. It will slam shut on October 17, 2022, so if you haven’t already, now is the time to make good on your commitment to filing by this date. Doing so will take it off your to-do list and reduce your tax penalty burden if you already have one to contend with.
Many taxpayers, freelancers included, misunderstand what an extension on their taxes really means, so here are the facts:
What happens if you didn’t file an extension and you didn’t pay by April 18, 2022?
What happens if you did file an extension by April 18. 2022, but you didn’t pay?
If you are missing information or need updated or corrected forms in order to file your taxes, these tips from the IRS can also help you take care of them so you can get your taxes filed by the October 17, 2022 extension deadline:
Another potentially missing or incorrect piece of information may be related to advance child tax credit or economic impact payments. You must have the total amounts of advance child tax credit payments and the amount of your third Economic Impact Payment to claim a recovery rebate credit and remaining child tax credit on return.
This information will be available in your online account or if you received these documents: Letter 6419, 2021 Total Advance Child Tax Credit Payments, and Letter 6475, 2021 Economic Impact Payment. This will help you file an accurate return. If you have lost or misplaced these letters, you can check your online account.
Married spouses who received joint payments will need to log into their own online account or review their own letter for their portion of the total payment. If filing a 2021 return as married filing jointly, you should add the payments together to provide the total amount.
While there are many different reasons why you may not have been able to file your freelance taxes on time, it is critical to meet the extension deadline, otherwise you will be faced with additional penalties.
Refund claim depends on your tax situation, generally, claim must be filed within 3 years from the time the return was filed or two years from the time the tax was paid, whichever of such periods expires the later, or if no return was filed by the taxpayer, within 2 years from the time the tax was paid. If you have no refund due, you have more than three years to file an amended tax return, Form 1040X, however, you will be subject to interest and penalties on the outstanding balance.
October 17 is just a few weeks away, do not delay getting your extended freelance taxes filed now. The time you spend today taking care of this will allow you to reduce your ultimate time, financial, and stress related to taxes so you can focus on finishing 2022 strong in your freelance business and file 2022 taxes in the clear of any additional penalties or previous freelance tax issues.
Jonathan Medows is a certified public accountant licensed in New York, New Jersey, Maryland, and Pennsylvania. He is also a recognized expert in taxation for freelancers and the self-employed—often tapped for his expert knowledge and perspective on self-employment taxation by national and regional publications such as The New York Post, BusinessWeek, Forbes taxation blog, WebCPA, CPA Practice Advisor, and others. You can read some of Jonathan’s press coverage here.
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