Finance

What is Tax Day? A look into the final day for Americans to get their tax returns and payments to the IRS

Published

8 months ago

April 12, 2024

Judy Shelton and Grover Norquist discuss the amount of U.S. debt under President Biden and the impending increase in taxes after Trump-era tax cuts expire on “The Evening Edit.”

Tax Day is quickly nearing, meaning the clock is winding down for Americans to file their returns.

You can file your taxes electronically or by mail. Submitting electronically will make for the faster receipt of a refund and is the quickest way to get your information filed to the Internal Revenue Service (IRS). If you do file by mail, make sure your envelope is postmarked by the due date.

Make sure you have all your documentation together and submit it before the filing deadline to avoid any fees.

Tax Day traditionally falls on April 15. (iStock)

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Here’s everything you need to know about Tax Day.

What is Tax Day?
When is Tax Day?
When did Tax Day begin?
What do I do if I miss the tax deadline?

1. What is Tax Day?

Tax Day marks when taxes are due in the United States. Taxes must be filed and paid by this date.

If you don’t pay your taxes on time, you’ll receive a Failure to File penalty from the IRS. This penalty is 5% of unpaid taxes for each month or part of a month that the return is late, according to the IRS, not exceeding 25% of unpaid taxes.

To avoid fees, make sure your return is filed and taxes are paid by Tax Day. (iStock)

2. When is Tax Day?

Typically, it falls on April 15, although it could fluctuate slightly from year to year. The main reason the date could change is if April 15 falls on a holiday or on a weekend.

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This year, April 15 is Tax Day for Americans, except for those in Maine or Massachusetts. Residents in those two states have a tax deadline of April 17, due to Patriots’ Day and Emancipation Day holidays, according to the IRS.

3. When did Tax Day begin?

The first time federal income tax was introduced to Americans was in 1862 by Abraham Lincoln, according to the IRS, in order to help pay for expenses associated with the Civil War. The first official Tax Day was in 1913 and had a March 1 due date, according to the Library of Congress.

In 1954, the filing deadline for individual tax returns was marked on April 15, according to the IRS, which has remained the modern deadline.

The push in the date helps tax filers by giving them extra time to gather financial information but also helps others in the tax filing process. Accountants receive additional time to help others file their taxes, and the IRS also has more time to work.

4. What do I do if I miss the tax deadline?

If you are unable to get your taxes filed by Tax Day, you can apply for a tax extension.

If you can’t get your taxes in by the deadline, you can file for an extension. (Daniel Acker / Bloomberg / File / Getty Images)

You must file your request by Tax Day in order to be granted an extension. You can request an extension through Oct. 15, according to the IRS.

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You can file an extension with Form 4868, according to the IRS. You can do this by mail, online or through a tax professional.

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The Federal Reserve just announced a third rate cut; fewer are expected in 2025

Published

17 hours ago

December 19, 2024

Business Finance News

Rates were cut by a quarter of a percentage point. (iStock )

The Federal Reserve just cut interest rates one more time this year. In their recent meeting, the Fed decided to cut rates by a quarter of a percentage point, dropping rates to 4.25% to 4.5%. This move was largely expected by economists.

The Fed cited indicators of an expanding economy and an easing labor market after its other rate cuts. This is the third time rates have been cut this year, but economists don’t expect as many cuts in 2025.

“The median member now expects that there will only be two cuts in 2025 and that the federal funds target will be 3% in the long run,” MBA Senior Vice President and Chief Economist Mike Fratantoni said in a statement. “MBA forecasts that the federal funds rate will only drop to 3.75% this cycle.”

The unemployment rate also remains low, and inflation is making slow but steady progress towards the committee’s 2% goal, both factors that created a bottleneck in the final decision to cut rates.

“While the unemployment rate has increased over the past year, and inflation has trended down, in recent months, inflation has plateaued,” Fratantoni said. “It was not surprising to see a dissent at this meeting, with one member voting to keep rates steady.”

With the latest rate cut, The Federal Reserve hopes to inch closer to their inflation growth and ease the unemployment rate.

Worried about the state of the economy? You could consider paying down high-interest debt with a personal loan at a lower interest rate. Visit Credible to speak with a personal loan expert and get your questions answered.

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Home sales likely to increase in 2025

The housing market has faced a roller coaster of a year, but certain aspects are expected to raise home sales in 2025. Real estate experts predict a slow thaw for mortgage rates, giving prospective buyers who have been priced out of the market in recent years more wiggle room.

Many housing market measures are trending closer to historical norms, showing signs of an improved market in the new year. Listings are still lower than before the pandemic, but there are significantly more than in March, when there was a 25% deficit, according to Zillow.

Buyers shouldn’t expect an entirely smooth path when buying in 2025, however. For many, 2025 looks eerily similar to the volatile market of 2024.

“There’s a strong sense of déjà vu on tap for 2025. We are once again expecting mortgage rates to get better gradually, and opportunities for buyers should follow, but be prepared for plenty of bumps on that path,” Zillow Chief Economist Skylar Olsen said.

Shoppers looking to move in the slower winter months have an advantage. Sellers who have been waiting for rates to drop may be looking to unload their homes while interest rates are on the decline.

“Those shopping this winter have plenty of time to choose and a relatively strong position in negotiations,” Olsen said.

If you’re looking to purchase a home, consider visiting Credible to find the best mortgage rate for your financial situation.

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Mortgage rates and home prices expected to fluctuate over the next year

More listings may be on the horizon, but buyers shouldn’t expect rock bottom mortgage rates any time soon. Prices also aren’t set to drop just yet. Prices are expected to grow by 3.7%, Realtor.com recently reported.

Mortgage rates are also expected to remain in the 6% range, with fluctuations over the year, much like 2024. Due to these small improvements, single family home listings are expected to grow by nearly 14%, according to Realtor.com.

Sellers in certain highly desirable areas will still hold the power in 2025. Inventory is improving, but it’s still limited compared to years past. This gives sellers the upper hand when negotiating prices.

How the newest presidential administration will factor in the housing market recovery process is difficult to predict, but there’s a potential for a “Trump Bump”, as Realtor.com calls it.

“While President-elect Trump can work quickly with his administration to implement some regulatory changes, other policies that will affect housing, such as tax changes and broad deregulation, require the cooperation of other branches and levels of government,” Realtor.com Chief Economist Danielle Hale said.

“The size and direction of a Trump bump will depend on what campaign proposals ultimately become policy and when,” Hale said. “For now, we expect a gradual improvement in housing market dynamics powered by broader economic factors. The new administration’s policies have the potential to enhance or hamper the housing recovery, and the details will matter.”

If you think you’re ready to shop around for a home loan, use Credible to help you easily compare interest rates from multiple lenders in minutes.

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Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.