Question: Khalil and Sarah have procrastinated on filing their 2022 returns. When meeting with their tax professional, they were informed that e-filing of personal returns is currently unavailable and will re-open in mid to late January. Eager to get 2022 behind them, the taxpayers want to mail their returns in now. Their tax professional advises against this. Since they owe a substantial amount of tax, will mailing in the returns now save them another month or two of additional penalties and interest for late filing of their 2022 returns versus filing in late January 2024?
Answer: Potentially, the answer is yes. Even though paper processing may take many weeks, or even months, the sooner the taxpayer can get payments submitted the quicker continued late payment penalties and interest charges can be stopped. Filing now may save two months of interest and additional penalties versus e-filing in late January when the system re-opens. E-filing will get the return processed more quickly, but saving money by paper filing now may be worth the extra processing time. The taxpayer could also consider making an electronic payment of the balance owed and wait to file the actual return until e-filing re-opens in January to expedite the return processing. However, the tax preparer should leave it up to the taxpayers to determine whether this is the best route to pursue.
