With tax season now well underway, we thought we’d offer up some tax filing basics, along with answers to common misconceptions regarding filing.
The opportunity to file this latest round of taxes began in January, and the last day to file is May 17, 2021.
Filers owed a refund based on the taxes they’ve paid throughout the year typically receive their refund within about three weeks of filing.
The Internal Revenue Service determines whether you owe additional taxes beyond what you’ve already paid to the federal and state governments, so if taxes are still owed, no refund is distributed.
Does filing affect credit?
Your credit will be affected only if the IRS files a federal tax lien.
The amount of tax you owe is the primary factor in determining whether your credit score will be affected. A lien will affect your credit if the amount you owe exceeds the threshold established by the credit bureau.
Errors before filing
Using whiteout is appropriate to make corrections on paper forms; however, PDF files are often readily available to fill in electronically and print off.
Errors after filing
If you make a mistake on your federal taxes, you may have to pay late fees -- and if your error results in owing more tax, the IRS will charge 0.5% per month or partial month, to a maximum of 25% on the amount still outstanding.
Tax fraud and evasion
Tax fraud convictions are rare, however, the penalties are severe for those caught committing tax evasion or fraud. Tax-related infractions include: intentionally failing to file a income tax return; willfully failing to pay taxes owed; intentionally failing to report all income received; making fraudulent or false claims; or preparing and filing a false return.
Often, those convicted of tax fraud must repay the taxes with a penalty and might serve up to five years of jail time. The IRS estimates that every year, about 17% of taxpayers fail to comply with the tax code in some way.
For more information, visit Frequently Asked Questions and Answers on the IRS website.
Don’t let your desire to get a tax refund lead to errors or missed opportunity.
Listed here are websites that provide assistance with filing and step-by-step guides: FreeTaxUSA.com; HRBlock.com; IRS.gov; TaxAct.com; TurboTax.com and Taxslayer.com.
This story was first published in 2019. It has since been updated.