As all US taxpayers know, tax returns must be filed by the deadline. Woe to the taxpayer who misses the deadline and faces penalties and interest accruing on those penalties.

To many of us it seems deadlines are forever looming and it can be difficult to determine the actual deadline that applies to your particular situation and tax return. So let’s explore the various IRS filing deadlines and who they apply to.

Original deadline

If you are an individual filing an individual tax return the most important date to remember is April 15th of the tax year following the tax return being filed. This year due to a federal holiday the deadline is April 18th, 2022. This is the date by which all taxpayers must file their individual tax return. There are exceptions and extension, however this is the first deadline and the others are calculated from that date.

Extensions

Extensions are always an extension to file and not an extension to pay any taxes that are due, or will be due when the return is filed. Therefore, all taxes must be paid by the original April 15th deadline. It is always better to overestimate tax rather than underpay. An overestimate means the overpayment will be refunded to you. Conversely, paying less than the real amount due will result in penalties and interest being charged on the amount that is left to pay.

Six-month extension

All taxpayers have the option of applying for a 6-month extension, which is always granted. This extension is called the Form 4868 “Application for Automatic Extension of Time to File U.S. Individual Income Tax Return”, and must be filed by April 15th.

Two-month extension

If you are a US citizen who is residing abroad on April 15th, you have an automatic two-month extension to file your return. Note, this is an automatic extension and you do not have to do anything in order for it to be granted. In cases where tax is due, it is recommended to add a note at the top of the return that this extension is being used.

Late filing

If you file late, you will be hit with penalties if either or both of the following apply.

1. You owe taxes
2. You are filing informational returns with your tax returns

Refund deadline

The last date to claim a refund is three years after the original due date of your return. So a 2021 refund can be claimed until April 15th 2024. If you had an automatic two-month extension until June 15th as a non-resident, then technically you have three years from July 15th to claim your refund. However, the IRS often challenge this and it is best to avoid using this extra extension and always advisable to file before April 15.

Penalties

The late filing penalty is 5% of taxes owing, per month, up to a maximum of 25% of the taxes owing. If you owe tax and have not filed by the due date, it is advisable to file as soon as possible to avoid penalties and interest accruing further.

If you are filing other informational returns with your tax return, then there are separate late-filing penalties that may apply to those forms. Penalties for missing or late-filed 5471 forms are $10,000 per year, with potential to increase to $60,000. Penalties for missing or late-filed 8938 Forms are $10,000 per year. For 3520 Forms, we are looking at a minimum $10,000 penalty as well.

Compliance procedure

If you did not file taxes for many years then you can become compliant by using the Streamlined Foreign Compliance Procedure. This is a special opportunity given by the IRS to allow taxpayers to begin filing tax returns again without facing penalties for all the years missed.

It has been available to more people since June 18th 2014, when the IRS removed the criteria that one needs to owe $1500 or less in taxes in any of the three delinquent tax years being filed. 

This procedure includes filing three years of delinquent tax returns, six years of Fbars and submitting a signed certification of non-willful conduct. This is a real boon if you owed taxes and failed to file for a number of years. The IRS have not disclosed how long this program will run.