There are only two weeks left before the April 18 tax deadline, and if you haven't filed your taxes yet, you'd better hurry up and do it or file an extension to avoid penalties and interest.

For the week ended March 24, less than half the number of Americans the IRS expects to file individual returns had done so. Only about 80.7 million returns had been received, down 0.8% from the same time a year earlier and well below the more than 168 million individual returns the IRS forecast for this season.

That likely means there'll be many late filers this year – both those who scramble to meet the April 18 midnight deadline or those who should file an extension to Oct. 16.

If you're in the first camp, the good news is the IRS is processing returns and churning out refunds faster than in 2022. It has so far processed 1.9% more returns compared with the same time last year and issued 2.6% more refunds. The bad news is the average refund is down 11% to $2,903.

But if you need to file an extension, here's what you need to know.

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It's important to know filing an extension entitles you to an additional six months to file your tax return, but it is not an extension to pay what you owe. You should estimate and pay any owed taxes by your regular deadline to help avoid possible penalties.

An extension request must be filed by the normal April 18 tax deadline. Since it's automatic as soon as you file it, your new deadline will be Oct. 16. If you owe taxes and don't file for an extension, the IRS will charge you a steep penalty for failing to file.

If you're due a refund or not required to file, you won't be charged a penalty, according to the IRS. However, experts say that could be a risky strategy. If you miscalculated and end up owing money, you could end up paying a big penalty.

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Filing for an extension is simple and free. You'll need basic information like name, address, Social Security number, estimated tax liability, and payment if you owe anything. Only those who owe less than $1,000 or paid at least 90% of the tax shown on the return for the taxable year or 100% of the tax shown on the return for the prior year, whichever amount is less, can avoid an underpayment penalty, the IRS says.

Individual tax filers, regardless of income, can use IRS Free File to electronically request an extension. Or you can electronically pay all or part of your estimated income tax due and indicate the payment is for an extension. Payments can be made with Direct Pay using the Electronic Federal Tax Payment System (EFTPS) or with a credit or debit card.

If you prefer to mail in a paper version of form 4868, make sure it's postmarked no later than April 18.

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It's free to file an extension, but again, you'll still have to pay an estimate of what you think you'll owe on your taxes by April 18.

Residents in states affected by a natural disaster could get more time to file returns and pay the IRS.

For example, Mississippi storm and tornado victims now have until July 31 to file various federal individual and business tax returns and make tax payments.

Mississippi was hit by tornadoes and severe storms on March 24 and 25.

Residents in other states could see relief as well, including Californians and New Yorkers hit by severe snowstorms and/or flooding this past winter.

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If you're receiving a refund, there's no penalty, according to the IRS. But if you don't file a return within three years, usually from the April deadline, you could lose the refund.

If you owe money, you face two penalties:

If both penalties are applied in the same month, the failure-to-file penalty will be reduced by the amount of the failure-to-pay penalty applied in that month. For example, instead of a 5% failure-to-file penalty for the month, IRS would apply a 4.5% failure-to-file penalty and a 0.5% failure-to-pay penalty.

On top of those penalties, the IRS charges interest on unpaid balances. The IRS updates the interest rate each quarter, but currently, individuals will be charged 7%.

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File your taxes or file for an extension anyway. As you can see from the examples above, the failure-to-file penalty is much steeper than the failure-to-pay penalty. Also, making a payment, even a partial payment, will help limit penalty and interest charges.

The IRS offers taxpayers a few options:

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If you're self-employed, meaning you don't receive a W-2 from an employer, and you expect to owe tax at least $1,000 when your tax return is filed, your first-quarter estimated taxes for 2023 are due on April 18, too. 

If you underpay this, you may be charged a penalty. You also may be charged a penalty if your estimated tax payments are late, even if you are due a refund when you file your tax return, the IRS warns.

You can use the IRS worksheet to determine how much you owe.

Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning. 

Contributing: Brett Molina. Follow Brett Molina on Twitter: @brettmolina23 or email him at [email protected]