JUST hours remain for Americans to file their 2024 tax returns, and being late could result in a 25% fine.
Another move made on the forms could result in significant consequences from the Internal Revenue Service (IRS).
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The decision made by some taxpayers comes as a suggestion from scammers who claim they can get them a bigger refund.
The bad actors wrongly encourage them to overstate information on their filing to boost refund amounts, a process known as the overstated tax withholding scam.
Scammers encourage Americans seeking assistance filing to specifically falsify their income level and hide details from the IRS.
It would include a deliberate withholding on W-2 forms, Wage and Tax Statement, or others like Form 1099-NEX or 1099s.
“Scam artists suggest people make up larger income and withholding amounts as well as the fictional employer supplying those amounts,” the IRS noted in a recent statement.
Taxpayers are then told “to file the bogus tax return electronically in hopes of getting a substantial refund due to the large amount of fraudulent withholding.”
The IRS will hold and review any American’s return where income can’t be matched and verified.
If the agency finds fraudulent activity, there could be fines up to 25%, totaling around $5,000, for each copy of the return that claims an incorrect income.
In some cases, taxpayers could face jail time of up to five years, per Gordon Law Group.
Americans should try significantly increasing their refund amounts through a crucial credit instead.
CLAIM THE CREDIT
It’s known as the Earned Income Tax Credit (EITC), and there’s still time to claim it ahead of the April 15 deadline for those who qualify.
The EITC was created to help support moderate to low-income households with children.
In 2025, the IRS will distribute checks as high as $7,830 through the EITC to over 23 million Americans.
Taxpayers who believe they’re eligible for the EITC must keep two considerations in mind.
2025 Tax Season
Tax season started on January 27 and folks must have theirs completed filed on April 15.
Those who fail to file by that time may face penalties.
However, taxpayers who need more time may file for an extension – this gives them until October 15.
The way to do this is by filling out Form 4868, the Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.
This can be done by mail, online with an IRS e-filing partner, or through a tax professional.
While there’s no set schedule, the IRS revealed that taxpayers may receive refunds within 21 days of filing.
Just be sure to avoid making mistakes on any forms as that could tack on extra time.
Those filing through mail will likely get their returns within a month or could even face delays as the IRS processes millions.
As of January 31, the average refund amount totaled $1,928, per the IRS.
This is compared to the $1,395 for the same period in 2024.
The average direct deposit refund for 2025 was even higher, the IRS said, at $2,069.
To check the status of your refund, The IRS has an online tool called Where’s My Refund?
This works within 24 hours of e-filing and generally within four weeks of filing a paper return.
First, they must determine what their filing status is — whether that’s single, married filing jointly, etc.
Additionally, they must determine their adjusted gross income (AGI).
The IRS describes AGI as “your total (gross) income from all sources minus certain adjustments listed on Schedule 1 of Form 1040.”
PAYMENT POSSIBILITIES
Based on taxpayers’ filing status and AGI, EITC amounts will vary.
For example, single filers with no dependents must have an AGI of no more than $18,591 to see any cash.
On the opposite end, married joint filers with three children must have an AGI that doesn’t exceed $66,819.
The example listed above would bring in the $7,830 maximum payout.
It’s also important that eligible Americans remember that EITC is a refundable tax credit.
That means the credit will first go toward paying off any outstanding amount owed to the IRS, and the remainder will be refunded.
There are also at least seven ways to file tax returns for free before it’s too late.
Some Americans could also miss an extra $5,000 back in a refund if they overlook an important filing option.