Expert Tax Tips: Avoid Penalties, Maximize Refunds, and Stay Safe from Scams (Full Transcript)

Speaker 1: Well, if you haven't filed your taxes yet now is the time the deadline is coming up tomorrow, which is why Jackson Hewitt's chief tax information officer, Mark Steber, joined me on zoom for some expert advice for you. Last minute filers. That includes me, by the way, he started telling me that if you owe, you must send money by tomorrow, even if you're filing for an extension.

Speaker 2: You have to pay the money that is due with your taxes by the deadline by midnight on the 18th with the extension, or you risk an underpayment penalty and a failure to pay penalty. So you have to pay the taxes in with the extension. A lot of people also think that because it's titled an automatic six month extension, you don't really have to do anything. Well, that's not true either. You do have to file that form either by paper or electronic or online, but you do need to send in something both for the federal and for the state in many cases to be compliant with the failure to file requirements. So you have to have something in or you'll get the failure to file. And if you don't pay and you owe failure to pay. And it's important to note that the failure to file penalty is 10 times bigger than the failure to pay. So anybody who's sitting out there going, yeah, I just, I'm not going to get around to it, get around to it or risk penalties and interest and fees to clean all that up.

Speaker 1: Let's talk a moment about the people who have already filed this year. The lucky ones. Many people, the IRS says that about 70 million of those actually have a refund already. And those refunds appear to be about 10% higher this year. So what's, what's going on? Why is that?

Speaker 2: It's a very good year for taxpayers. I'm not really sure why all these people are waiting. Refunds are in fact up and that's all a direct result of all the tax law changes that took place in 2021 new child tax credit of up to $3,600 fully refundable dependent care credit up to $8,000 fully refundable new earned income credit for a single taxpayer, $1,500. And it used to be a few hundred. So there's a lot more benefits, a lot more complexity accordingly, but a lot of people are getting some well needed money when they file their taxes. And as I said, at the start, three out of four taxpayers are currently getting a tax refund. And we expect that statistic to hold, you know, all the way through the deadline tomorrow.

Speaker 1: Well, let's talk about what's going on with the IRS. They appear to be short staffed again this year and refunds are taking more time. Is that what you're seeing?

Speaker 2: We're seeing a great many people fund very quickly, 21 days, even with the IRS challenges, provided they electronically file and electronically deposit that refund and all of the data is accurate. No guessing, no estimating, no guesstimating. No, I kind of remember that number. It has to be accurate because the IRS matches it. And if all three of those work accurate electronic file and electronic refund two weeks to 21 days for nine out of 10 people.

Speaker 1: All right, Mark. So the final question is, it is that time of year. So, so many people making these financial disclosures, expecting money back. And that breeds a whole other world of people that are trying to get that money scams. What are you seeing this year? Are we seeing more problems than in the past? Is there anything to warn people about right off the start?

Speaker 2: Yep, certainly seeing more dealers and scammers and attempts to steal money. Good news is most Americans have gotten a bit wiser. Most taxpayers are a little more savvy and certainly the IRS has gotten it better at stopping identity theft tax refund fraud. Two things to keep in mind, the IRS never calls, they do not email. So if you're getting a phone call or an email from the IRS, take that down to your closest tax friend, even at Jackson Hewitt, ask them to look at it. They'll debunk it very quickly. But do not give your personal information out for any reason related to your income taxes, unless you have placed a call, unless you have placed a message and gotten one of those, you know, courtesy, we'll call you back. Absent that, it will not be from a federal authority. It will not be from a state authority looking to help you with your taxes. It will be a bad guy trying to steal your money.

Speaker 1: Well, you can tell from all of Mark's energy that they are ready for those last minute filers. So call someone now if you need help. Again, Mike said to make sure you do not file a paper return and that you file electronically. As Mark mentioned, it will help you get your refund faster and lessen the chance of being scammed.