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  • Ann C Wood

Understanding Tax Day: What You Need to Know and Special Consideration




Understanding Tax Day

The time to file an income tax return is here. It’s a time marked by paperwork, calculations, and perhaps a touch of stress for some.

While Tax Day can indeed be stressful and confusing for individuals and businesses alike, it doesn't have to be. 

By having a clear understanding of what Tax Day involves and keeping special considerations in mind, you can confidently navigate this annual event with clarity. 


In this blog post, we will explore detailed insights about Tax Day, its significance, and special considerations that may affect your tax situation.

Table of Contents:

  1. What is tax day?

  2. How do you file your income tax return?

  3. What happens if you do not make it to the tax deadline? 

  4. How do I file for an extension in 2024?

  5. Special Considerations

  6. Conclusion.

 What is Tax Day?

 In simple terms, Tax Day is the annual deadline for filing income taxes.

 In the United States, tax day is when an individual's income tax return is to be submitted to the federal government. It typically falls on April 15th each year, unless that day falls on a weekend or holiday.

Furthermore, a large portion of residents of the USA have to inform the Internal Revenue Service (IRS) of all the income they have received in the previous fiscal year. This includes reporting their income, deductions, credits, and any taxes owed to the government.


How do you file your income tax return?

To file your income tax return in 2024, here are a few steps that you need to follow:

Gather the necessary documents: You will need the documents and receipts that will show the money you earned and the tax-deductible expenses you paid. These include:

  • 1099 forms for additional income sources such as income from a rental property, and work as a freelancer or independent contractor. 

  • Receipts for any deductible expenses, like charity to institutions, interest, and state and local taxes.

Choose your filing status: Filing status is important because the amount you pay is determined by your marital status, the number of children, and several other factors. The percentage you pay towards household expenses affects your filing status. 


Choose a filing method: Determine how you want to file your taxes. If you’ve used tax software in the past, you already know how to do taxes online. Once you log in, the program will ask you several questions about your tax life, income, and expenses to fill out the form you will need to submit to the IRS.


The IRS recommends using the free filing method if your adjusted gross income is $79,000 or less. 


Complete your tax return. Fill out your tax return accurately. This includes reporting all sources of income, deductions, and credits.


What happens if you can’t make it to the tax deadline?

If you don’t pay the tax when it is due, there will be consequences in the form of fees and penalties. 

  • The penalty you must pay is a percentage of the taxes you didn’t pay.

  • The IRS imposes penalties for late charges. The IRS imposes a failure to file penalty and a late payment penalty, which is 0.5% of the unpaid taxes each month or part of the month tax remains unpaid. 


In addition to penalties, the IRS also charges interest on any unpaid taxes from the site date of the return.

How do I file for an extension in 2024?

Filing a tax extension can be helpful for people who may be missing important tax documents or who need extra time to get their paperwork together.

This can also help you avoid incurring a late filing penalty.

It's important to understand that a tax extension only pushes out your filing deadline, not your payment due date.

In 2024, a tax extension that’s submitted by April 15 would move your filing deadline to October 15.

Here’s how you can file for an extension in 2024:

Fill out the form. Provide all the details in Form 4868, including your name, address, taxpayer identification number, and estimate of total tax liability for the year.


You can submit Form 4868 electronically through different software programs, or you can send the form by mail to the appropriate IRS address.


Make sure to keep a copy of your Form 4868 for your records. If your extension is approved, your new filing deadline will be October 15, 2024.


Make sure to complete and file your tax return by this extended deadline.

Some special considerations:

  • Life events: Significant life events such as marriage, the birth of a child, or the purchase of a home can impact tax obligations. These changes may affect your filing status, deductions, and credit.

  • Retirement savings: Contributions to 401(k)s or individual retirement accounts can help you have a financially secure future and provide tax benefits.

  • Remote work: Income tax for remote workers can be complex, especially if the remote workers reside in a different state than the employer’s primary location. Taxpayers should understand that the tax obligation is crucial to avoid any surprises on tax day.

  • Charity to Institutions: Taxpayers should maintain a record of their charitable contributions, as donations to that charitable institution can result in a deduction to the taxpayer. 

As a result, taxpayers should maintain a record of their contribution, including receipts and acknowledgments received from the charitable institution.


Conclusion

Tax Day doesn't have to be a source of stress or confusion. Whether you choose to prepare your taxes yourself or seek professional advice, it's important to stay informed and be proactive for a smooth filing experience.


Prime Financial Services is here to support you with experienced guidance on tax filing advice, taxation, and retirement planning. Take control of your finances and secure your future with our comprehensive seminars designed for medical professionals. Book a seat now at: https://www.pfinancialservices.com/seminar-request


FAQs on Tax Day:


  1. When do I need to file a tax extension?

  Ans: Tax Day, April 15, 2024, is the last day to submit a request for an income tax extension. This gets you six more months to file your tax return.


  1. What is important about paying tax?

Ans: The amount of tax you pay the government is used for the benefit of the country. Infact, Taxpayers are the backbone of the country.



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