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7 Last-Minute Reminders for Tax Day 2024

By John Manganaro

Slideshow April 15, 2024 at 11:43 AM Share & Print

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All your clients might not be ready for it, but Tax Day 2024 is here.

Taxpayers who can’t meet the deadline can apply for a six-month extension for filing, but they still must pay an estimate of any taxes they owe by April 15. In 2024, a timely filed extension moves the tax filing deadline from April 15 to Oct. 15.

Given that Tax Day is here, clients have likely gathered all their necessary information and submitted their forms, along with any unpaid taxes due to the Internal Revenue Service. They have also likely already made any retroactive individual retirement account contributions or taken other strategic actions, such as harvesting losses, gifting or making charitable contributions to manage their overall tax liability.

However, even with the deadline upon us, the IRS and tax experts have released some important reminders for taxpayers to keep in mind as their returns are processed or they grapple with a delayed return.

See the gallery for seven useful Tax Day insights from IRS notices and the ALM Tax Facts library.

John Manganaro

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7 Last-Minute Reminders for Tax Day 2024

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1. Anyone can use the IRS Free File system to request an extension.

In 2024, a timely filed extension moves the tax filing deadline from April 15 to Oct. 15.

While taxpayers with income of $79,000 or less in 2023 can file their returns using Free File, any taxpayer, regardless of income, can use the system to file for an extension at no cost.

A Spanish language version of the free tax filing service is also available.

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2. Taxpayers can track the status of their return.

Taxpayers can use the "where's my refund" tool at IRS.gov to check the status of their refunds.

For faster refunds, taxpayers should sign up for direct deposit, but paper checks are still available.

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3. Automatic filing extensions are available.

Taxpayers should also remember that if they need more time to file their taxes, they can receive an automatic extension and file by Oct. 15.

Taxpayers can 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.

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4. An extension doesn't deliver tax payment relief.

The filing of an automatic extension does not apply to payments owed to the IRS.

Taxpayers who owe underpayment amounts must pay by April 15 or they will be subject to interest and penalties.

Credit: Adobe Stock

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5. Installment payment plans are available.

Taxpayers can request installment plans if they are unable to pay in full by April 15.

Failure to pay penalties are cut in half for taxpayers who are paying on an approved installment plan.

Credit: Adobe Stock hands and a stack of money

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6. Unclaimed 2020 tax refunds will soon expire.

The IRS recently issued an announcement reminding taxpayers that they only have until May 17 to file 2020 tax returns and claim their refunds. The IRS estimates that about $1 billion in refunds remain unclaimed because people have yet to file their 2020 tax returns.

The IRS says taxpayers should also understand that they may stand to gain more than a simple refund of taxes that were withheld from their paychecks during the 2020 tax year, when many taxpayers were unemployed or underemployed for pandemic-related reasons.

The earned income tax credit and recovery refund credit can increase the amount of money the IRS may owe taxpayers. Taxpayers should also remember that many credits were expanded during the pandemic era — so they may qualify even if they typically wouldn't.

Credit: Shutterstock

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7. Time to consider upcoming RMDs.

Now that tax season is winding down, many taxpayers may be newly focused on strategies to minimize future tax liability. For higher-net-worth clients who have reached RMD age, those required minimum distributions may significantly increase taxable income.

These clients do have options. If the client was planning to donate to charity anyway, using the qualified charitable distribution strategy can help offset or outright eliminate the client’s taxable RMD.

Clients may also be interested in qualified longevity annuity contracts because the value of the contract is excluded from the value of their retirement account for purposes of calculating their RMD amount until age 85.

Clients who are still working may qualify for the “still working” exception to the RMD rules if they aren’t a 5%-or-more owner in the business. Some retirement plans permit the client to delay RMDs until April 1 of the year after they retire.

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