End of Tax Season Questions: Know Your Options

With the April 15 tax deadline quickly approaching, many taxpayers still have questions about what happens if they need more time, owe more than expected, or discover changes after filing. Whether you are finalizing your 2025 tax return, filing an extension, or planning ahead for the rest of the year, understanding your options can help you avoid penalties and make more informed financial decisions.

Below are answers to some of the most common end-of-tax-season questions our advisors hear this time of year.

Question: What if I can’t file my return on time?

Answer: April 15 is the traditional tax filing deadline for most individual income tax returns. If you can’t complete your tax return by then, file Form 4868 with the IRS to give yourself up to six additional months to complete your return. Caution: Form 4868 only extends your filing deadline; it does not extend your tax payment deadline. If your tax is not paid in full by April 15, you’ll face interest and penalties on the balance owed.

Question: What kind of penalties will I be charged if I pay my taxes late?

Answer: If you fail to pay all your taxes by the April 15* deadline, you’ll have to pay the IRS interest and penalties on your underpayment. The IRS charges interest at its prevailing rate, which it publishes quarterly. The late payment penalty is generally .5% for each month there is an unpaid balance, up to a maximum 25% penalty. When you file a late return with a balance due, another nasty penalty kicks in – the late filing penalty. This penalty amounts to 5% per month, for a maximum of five months. For example, if you owe $5,000 in taxes and failed to file a return or an extension by April 15, the failure-to-file penalty could build up to as much as 25% or $1,250.

*When April 15 falls on a Saturday, Sunday, or legal holiday, the deadline for filing is generally moved to the next business day.

Question: What if I owe more money to the IRS than I can pay?

Answer: The IRS offers several options to taxpayers who cannot pay their taxes in full when they file their return.

• You can charge your taxes on a credit card. The IRS’s credit card service providers charge a convenience fee of about 2.0% in addition to the interest rate your credit card company charges on your balance.
• You can request to pay your taxes to the IRS in installments. If you owe $50,000 or less and agree to pay off the balance within a six-year period, the approval process is pretty straightforward. Larger balances can be set up on an installment plan too, but they won’t be automatically approved. The IRS will continue to add interest and penalties to your account until you pay off the balance.
• You can enter into an offer-in-compromise agreement with the IRS to settle your tax bill and get off to a fresh start. Under this arrangement, the IRS will settle your account for a portion of the tax you owe if you agree to file and pay your future taxes on time. You’ll have to submit financial information to the IRS to prove that you don’t have the money or ability to pay off the entire balance.

Question: How can I check the status of my tax refund?

Question: After I filed my tax return, I discovered an error. How do I fix it?

Answer: Oversights and errors are not uncommon, so the IRS provides a way for you to correct them. You can correct your return for up to three years after you file your original return by filing an amended return with the IRS. You need to tell the IRS why you are correcting the return, and include the appropriate documentation with your amended return. If you’ve discovered income or deductions that you should have reported on your income tax return, give us a call. We can help you set the record straight and pay only the tax actually due.

Question: Who has to make estimated tax payments?

Answer: If you have income from which no income tax is withheld (such as business income), you may be required to make quarterly estimated tax payments. Also, if you don’t have enough income taxes withheld from wages and pensions to cover your tax liability, you may need to make estimated tax payments. Federal estimated taxes for individuals are paid with Form 1040-ES and are due on April 15, June 15, September 15 of the tax year involved and on January 15 of the following year. If this is your first year with self-employment income or increased interest and dividend income, review your requirements for quarterly estimates to avoid being penalized by the IRS.

Question: Is it wrong to receive a large income tax refund every year?

Answer: Usually yes, but that’s because it means you’re giving the IRS an interest-free loan when you could have the use of that money during the year to invest for yourself.

Instead, consult with your trusted CPA each year for tax planning and projections:

• Take the time to estimate your total tax bill for the year.
• Consider adjusting your withholding so that the amount your employer withholds comes closer to what you will actually owe on your tax return.
• Change your withholding at any time during the year by giving a new Form W-4 to your employer to make mid-year corrections.

Tax season may be winding down, but tax planning is a year-round activity. Stay ahead of tax deadlines and avoid surprises by partnering with an expert CPA for tax season and beyond.