What are the penalties for not filing by October 17th extension deadline if I overpaid?

Wait so if someone underpays with their extension, they would be charged the penalty for filing after the extension deadline? But if they overpay they're fine? Does it matter how much they overpay by?

That's correct - the failure-to-file penalty is calculated as a percentage of unpaid taxes. If someone underpaid with their extension, they would face penalties for both underpayment and late filing after the extension deadline. The amount of overpayment doesn't matter for penalty purposes - as long as you've paid 100% or more of what you actually owe, there's no penalty basis. However, it's generally not advisable to drastically overpay as you're essentially giving the IRS an interest-free loan of your money until you file and receive your refund.

How does it work with documents? Like do you have to upload all your W2s and 1099s and stuff? Is it secure? I'm always nervous about putting my financial docs online.

Sounds interesting, but how accurate is it for complicated situations? I've got rental property income, some stock sales, and a small business. Would it handle something like that or is it more for basic W-2 situations?

You do upload your tax documents, but they use bank-level encryption and don't store your actual documents after processing. You just take pictures or upload PDFs of your forms, and it extracts all the relevant information. I was nervous about that too, but their security explanation put me at ease. For complicated tax situations, that's actually where it shines most. My situation included some stock sales with basis issues, freelance income, and a home office deduction. It handled everything and even found some deductions I missed. The system is designed to handle complex scenarios that have multiple forms and income sources - much more than just basic W-2 situations.

How does this even work? The IRS phone lines are always jammed - how can some service get you through faster than everyone else?

Sounds like BS to me. If there was a way to skip the IRS phone queue, everyone would be doing it. I've called dozens of times about my identity theft case and always get the "try again later" message. Nothing can fix the IRS phone system.

It works by using technology to navigate the IRS phone system for you. Instead of you personally having to call repeatedly and hit redial when you get the "high call volume" message, their system does this automatically and calls you once it establishes a connection with the IRS. It's basically doing what you would do manually but with technology that can be persistent. I was skeptical too at first. I had tried calling for three days straight with no luck. But with Claimyr, I got through in about 20 minutes. It's not skipping the queue - it's just efficiently getting you into the queue when space opens up instead of you having to manually redial constantly. That's why not everyone knows about it yet, but it legitimately works.

Thanks for this additional info! I definitely will file long before that 3-year deadline hits, but good to know there's an absolute cutoff. Does the same apply for state taxes or does that vary by state?

The 3-year refund claim deadline is for federal taxes. State tax deadlines vary by state - some follow the federal 3-year rule, while others have shorter or occasionally longer timeframes. For example, California and New York generally follow the federal 3-year rule, but some states like Montana only give you 2 years to claim a refund. I'd recommend checking your specific state's tax agency website for their rules since it's not standardized across all states.

True, but with the current disaster at the IRS with processing times, you might not get that refund anytime soon anyway. My brother filed in April and just got his refund last week!