If you filed your 2019 or 2020 taxes late, then you’re likely eligible for a rebate on those late fees. More than a million Americans will get a rebate from the Internal Revenue Service (IRS) or have their late fine canceled.
The relief applies to the failure to file penalty, which can be hefty. The penalty grows at about 5% per month up to 25% of the taxes that are unpaid when you finally do file. The IRS says “most people and businesses” who filed “certain” returns late will be eligible.
Don’t miss
That means 1.6 million people could soon receive an average refund of $750, which will add up to more than $1.2 billion. But if you’re one of the 1.6 million, you’ll have to file your overdue taxes by the end of the month or you could miss out.
Many people missed the deadline
Let’s be honest, deadlines were hard to meet during pandemic lockdowns for a lot of reasons.
“This will help a lot of taxpayers that couldn’t meet with their accountants, couldn’t file their taxes on time,” says Eileen Sherr, director for tax policy and advocacy with the American Institute of Certified Public Accountants (AICPA).
The relief applies to the 1040 and 1120 form series, which deal with income and corporate taxes. And Sherr says the move on the IRS’s part was necessary.
“We’ve been asking for it for years now, since the beginning of the pandemic,” she says.
Sherr points out that a larger than average number of people failed to meet the filing deadlines during the pandemic because of business closures and administrative backlogs.
“Sometimes it was just like a day or two late, a week or two late, but there were penalties that were assessed,” Sherr says.
But because the IRS only announced the relief in August, the AICPA worries many people might not be able to meet the deadline. To that end, the organization sent a letter to the IRS requesting that the deadline extension for getting the 2019 and 2020 taxes be extended beyond Sept. 30 to the end of the year.
“Especially if you have taxpayers who are abroad, and they’re trying to file and get all their returns — it’s really hard to get everything in time to meet this short deadline,” says Sherr. “It would just give more time for more people to voluntarily comply, if they haven’t, and for all the penalty issues to be resolved.”
How to make sure you get it
If you haven’t filed your 2019 or 2020 taxes yet, then you’ll need to do so by Sept. 30 to be eligible for relief.
But if you’ve already filed and paid a penalty, then you shouldn’t have to do anything to get your refund. That being said, if you’re expecting a refund, Sherr suggests checking your account on the IRS website.
However, keep in mind that it may take a few weeks for the refund to be processed. And the forgiveness only applies if you filed late, not if you paid late.
“[The] IRS said they were going to try to get the adjustment by the end of October … It could take a month or two. But I would say by the end of October, that account should be adjusted.”
If you don’t see something by then, Sherr suggests contacting the IRS.
And if you get a notice warning that you filed late and will need to pay a late penalty but believe you’re eligible for this exemption, then you should contact the IRS, says Sherr.
“You can just respond back that the notice applies and it should be abated.”
What to read next
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Source: https://finance.yahoo.com/news/1-6-million-americans-average-143000542.html