What To Know About Tax Day 2023?

stimulus checks
Tax Refund

The 18th of April was the deadline for taxpayers to file their annual returns. The Tax Day usually falls on the 15th of April, but since the date fell on a Saturday this year, and due to a holiday in Washington, the deadline for filing was shifted to the 18th of April. As of the 7th of April, the Internal Revenue Service has already processed close to 101 million returns.

The Tax Day Is Here- What Do You Need To Know?

The average refund to the taxpayers has been $2,878, which was down from $3,175 at the same time this year. The lower refunds are mostly attributed to the elimination of key credits which were available to the taxpayer last tax season. The taxes were due on the 18th of April– set as Tax Day, and taxpayers who didn’t file by the deadline would be facing hefty penalties. According to the IRS, the penalty would be 5% of the unpaid taxes for every single month one didn’t pay- but it likely won’t exceed 25%. 

If one fails to pay their taxes on tax day, the penalty would be 0.05% of unpaid taxes for every month one doesn’t pay- with a cap set at 25%. Along with the estimated tax payments of the first quarter, Tuesday was said to be the last call for one to contribute to the IRS for a tax deduction unless one lived in an area that was granted a filing extension by the IRS.

The total combined contributions for both the Roth IRAs and traditional IRAs have been capped at the smaller of $6000 or $7000- if one is aged 50 or older by the end of the year. The IRS also mentioned that this would be the taxable compensation for the year.