The Internal Revenue Service (IRS) has reminded taxpayers they can select direct deposit to speed up their tax refund.
With the April 15 tax filing deadline less than two weeks away, the IRS has urged anyone who still needs to return their taxes to do so electronically, meaning they can receive their refund within 21 days. According to the IRS, direct deposit is the most commonly used method of receiving a tax refund, with eight out of 10 taxpayers getting their money this way.
"Combining direct deposit with electronic filing is the fastest way to receive your refund," the IRS explains. "There's no chance of it going uncashed, getting lost, stolen, or destroyed." The service also outlines that even if you have chosen not to file your taxes electronically, you can still select to have your refund issued via direct deposit.
In the release issued on Tuesday, April 2, the IRS also issued advice for those who may be struggling to file and pay their tax returns on time. Taxpayers are urged to secure extensions before the April 15 deadline.
What Should I Do if I Can't File on Time?
Taxpayers have been urged to "get ahead" before this month's deadline and to take necessary measures if they don't believe they will be able to file on time.
All federal taxes are due on April 15, with the exception of Maine and Massachusetts, where state holidays push the deadline back to April 17. While any owed amounts must be paid by the deadline, the paperwork can be delayed.
Read more: Tax Prep Checklist 2024: What Do You Need to File Taxes?
Individual tax filers, regardless of income, can electronically request an automatic tax-filing extension through IRS Free File by filing a Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. This must be requested prior to April 15.
What if I Can't Pay?
If you are unable to pay your taxes in full by the deadline, the IRS advises paying as much as possible and applying for an online payment plan, which grants an immediate response without the need to call or write to the government agency.
There are two types of payment plans available:
- Short-term payment plan, which can be used when the total balance owed is less than $100,000 in combined tax, penalties and interest. This grants the taxpayer up to 180 days to pay the balance in full.
- Long-term payment plan, which can be used when the total balance owed is less than $50,000 in combined tax, penalties and interest. Pay in monthly payments for up to 72 months. Payments may be set up using direct debit. For balances between $25,000 and $50,000, direct debit is required.
If you are late paying your taxes, the IRS levies 5 percent of the unpaid taxes for each month or part of a month that a tax return is late. The penalty cannot exceed 25 percent of your unpaid taxes. However, "failure-to-pay" penalties are halved while an installment agreement is in effect.
Read more: 2023-2024 Tax Brackets and Federal Income Tax Rates
"Interest and a late payment penalty will apply to any payments made after April 15," the IRS advises. "Making a payment, even a partial payment, will help limit penalty and interest charges."
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