As October 15 rapidly approaches, millions of taxpayers across the US are preparing to meet critical deadlines. Most people know that this date marks the final day to file federal tax returns for those who requested an extension earlier in the year. However, many need to be made aware that several other important tax-related deadlines are also tied to this date, which could have financial consequences if missed.
Tax Deadlines for October 15
Here’s a detailed breakdown of the various tax deadlines expiring on October 15.
1. The Federal tax extension deadline
For individuals who filed for an extension back in April, October 15 is the last day to submit 2023 federal tax returns. Initially, the tax deadline was April 18, 2024, but the IRS allows a six-month extension for those who needed more time to file.
Failing to file by October 15 comes with penalties. The IRS can impose a failure-to-file penalty of 5% of unpaid taxes for each month your return is late, up to a maximum of 25%. In addition, interest accrues on penalties, which increases the amount owed.
Important note: The extension only applies to the submission of the return, not the payment of taxes owed. Taxes were still due on April 18, 2024, and if not paid by then, a failure-to-pay penalty, which accrues daily at 0.5% of the unpaid taxes per month, will also apply. Therefore, if you owe taxes, it’s advisable to pay them immediately to minimize the growing penalties.
2. IRS deadline for disaster-affected areas
Hurricane Helene, a Category 4 storm, ravaged parts of seven U.S. states: North Carolina, South Carolina, Alabama, Georgia, Tennessee, Florida, and Virginia—in late September 2024, prompting the IRS to grant special tax relief to affected residents. The IRS has extended the deadline for filing certain tax returns until May 1, 2025.
This extension covers individual federal income tax returns for those who requested an October 15 extension. The same relief applies to estimated tax payments originally due on September 16, 2024, and other payments, such as quarterly payroll and excise tax returns, with deadlines now extended to early 2025.
Additional relief: Taxpayers in affected areas may also qualify for leniency on early retirement plan distributions. Individuals withdrawing from a retirement plan or IRA due to the hurricane could avoid the 10% early withdrawal penalty, though specific plan rules may apply.
3. State-specific tax deadlines
In addition to the federal tax extension, several states have aligned their tax filing deadlines with the IRS’s October 15 deadline. If you live in a state like Alabama or Kansas, where state tax extensions follow the federal timeline, you must file your state tax return by October 15 if you received an extension earlier this year.
However, not all states adhere to this schedule. For instance, Virginia has an extended tax deadline of November 1, and New Hampshire allows taxpayers to file until November 15. Louisiana also gives an extended deadline of November 15 for personal income tax returns. These varying state deadlines can catch taxpayers off guard, so it’s essential to double-check with your state’s Department of Revenue.
It’s essential to check the specific deadline for your state. Most state tax agencies offer detailed information on their websites, and taxpayers are advised to avoid assumptions about extensions that might not apply, especially if they owe state taxes.
4. SEP IRA contribution deadline
For self-employed individuals and business owners with Simplified Employee Pension (SEP) IRAs, October 15 also marks the last opportunity to make 2023 contributions. This deadline aligns with the extended filing deadline for federal income tax returns.
Contributing to a SEP IRA can offer tax advantages, particularly for small business owners. Contributions made before the October 15 deadline are deductible from the 2023 taxable income, potentially reducing tax liability. The maximum contribution amount for 2023 is the lesser of 25% of employee compensation or $66,000.
5. Solo 401(k) Contribution Deadline
For self-employed individuals using a Solo 401(k) for retirement savings, October 15 is the final deadline for contributing to the plan if they requested a tax extension.
For 2023, individuals can contribute up to $66,000 to their Solo 401(k), or 25% of their net adjusted self-employment income, whichever is lower. For individuals aged 50 and above, catch-up contributions raise the limit to $73,500.
6. Correcting excess IRA contributions
For individuals who made excess contributions to their IRA accounts in 2023, the October 15 deadline is also the last opportunity to correct these mistakes. If the excess contributions are not withdrawn by this date, the IRS will impose a 6% excise tax on the excess amount for every year it remains in the account.
The contribution limit for traditional and Roth IRAs in 2023 is $6,500 for individuals under 50 and $7,500 for those aged 50 and older. Any amount over these limits is considered an excess contribution and subject to penalties.
