Many people know that the filing deadline for an extended tax return is October 17, but there are additional tax deadlines on this day. Regarding taxes, we often have one date in mind: the deadline for filing federal income tax forms. “Tax Day” fell on April 18 for most taxpayers in 2022. Nevertheless, this is not the sole tax deadline for the year. In reality, there are various upcoming deadlines on October 17 that many individuals should consider.
It is crucial to recognize and comprehend all tax deadlines, especially those on October 17. A missed deadline might cost you a significant amount of money in the form of fines, interest, or additional taxes. Here are five tax deadlines for October 17 that you should not miss. Examine them to determine whether anything surprising applies to you.
Extension of Federal Tax Returns
If you did not submit your 2021 federal income tax return by April 18, 2022, and you sought an extension by that date, the new filing deadline is October 17, 2022. Remember that requesting an extension to file does not extend the time you have to pay any taxes you owe. You were still required to estimate the amount of tax due and pay before April 18. Otherwise, fines and interest may be assessed on the outstanding sum.
Some individuals may have more time to submit an extended federal tax return. For instance, taxpayers residing overseas or who fought in a conflict zone may be permitted to file a return with an extended due date after October 17. In addition, the IRS enables some victims of natural disasters to file an extended return after October 17 in certain circumstances. Check the IRS’s disaster relief website to discover if this form of disaster help is permitted in your region.
Additional State Tax Returns
For some individuals, a state tax return is also due on October 17, 2022. If you requested and were granted an extension, you will likely need to file your state income tax return by October 17 (maybe a local tax bill too).
Many states have aligned their state tax return due dates with the federal government. Since October 17 is the deadline for prolonged federal tax returns, it is also the deadline for many extended state tax returns. It would be best if you verified with your state’s tax agency so that you understand the deadlines for things like extensions, anticipated payments, and other tax returns.
Take advantage of SEP IRAs.
SEP IRA, or Simplified Employee Pension IRA for short, is favored by self-employed individuals and small company owners who wish to save money with a straightforward and affordable retirement plan. A SEP IRA allows you to save more for retirement than an employer-sponsored 401(k) plan. You may contribute up to 25% of your salary or $61,000 in 2022, whichever is less.
A SEP IRA allows for more retirement savings than a conventional or Roth IRA. Remember that the contribution limitations for both regular and Roth IRAs in 2022 are $6,000 ($7,000 for individuals 50 or older).
Establishing a SEP IRA by the tax filing deadline (including extensions) is necessary for the year in which the contribution qualifies. The deadline for contributions to the account remains unchanged. Therefore, if you applied for an extension, you have until October 17, 2022, to establish and fund a SEP IRA for the 2021 tax year.
Contribute to a Solo 401 (k)
Individuals who are self-employed and have requested an extension to submit their 2021 federal income tax return have until October 17 to contribute to a Solo 401(k) for the 2021 tax year. In 2021, a self-employed individual can contribute a maximum of $58,000 to a Solo 401(k). Anyone 50 or older is eligible to contribute up to $64,500. (These amounts will increase to $61,000 and $67,500, respectively, in 2022.)
Because you can contribute to a Solo 401(k) as both an employee and an employer, these restrictions may appear excessive. Remember, however, that 401(k) contribution limits are based on total contributions. Consequently, if you contribute to a 401(k) plan via your employer, that amount will count against the total maximum of $58,000 or $64,500, and your Solo 401(k) contribution limit will reduce.
Remove or Reclassify Excess IRA Contributions
You made excessive contributions to your IRA and now have surplus contributions! What do you do? The optimal response is to remove the excess money before the tax return filing deadline for the contribution’s taxable year (including any extension). Therefore, if you requested an extension to file your 2021 tax return, you have until October 17, 2022, to remove excess cash contributed in 2021. This helps you to avoid the 6% penalty for timely withdrawals, and a 6% annual penalty will apply if this is not done promptly.