Since it's April (Financial Literacy Month), we need to talk about raising "public awareness about the importance of financial literacy." I'm borrowing that phrase from the Jump$tart Coalition for Personal Financial Literacy, a non-profit organization (tinyurl.com/ycyskumv), but I'm all for advocating for the cause -- and not just in April.

Here's why. As regular readers know, I'm all about financial security in retirement. And what could be more important for retirement than having a strong foundation in financial literacy?

The problem is that only a small percentage of the population is actually prepared to make sound financial decisions. There is simply a lack of knowledge of even the most basic of financial subjects.

When tested, the results are embarrassing. How would you feel about your knowledge if you got 1 out of 3 questions right? That's the score (31%) on a financial literacy test conducted by the America College of Financial Services (2023 Retirement Income Literacy Study of 3,765 Americans ages 50 to 74 -- tinyurl.com/yrpbzxm7).

The 12 topics covered on the test included inflation, life insurance, Social Security, retirement plans, taxes, retirement income, investments and long-term care.

Hopefully, we'll see better results as more high schools start implementing financial literacy programs.

The recently released 2024 Survey of the States (tinyurl.com/3mz8hm4y), conducted by the Council for Economic Education, reported that 28 states now require a student to take a course in economics in order to graduate, an ever-so-slight improvement (three states) from 2022, when the last survey was published.

Thirty-five states require students to take a course in personal finance to graduate, an improvement of 12 states from the 2022 survey. This improvement "will lead to over 10 million additional K-12 students -- 21% of current students -- gaining guaranteed access to this knowledge," according to the Council for Economic Education.

The idea of teaching kids personal finance in high school is embraced by close to 9 out of 10 (88%) adults, according to a National Endowment for Financial Education poll. In fact, 80% said "they wish they [themselves] were required to complete a semester- or yearlong course focused on personal finance education during high school" (tinyurl.com/5ea8se7a).

Math may be an important component. A study commissioned by the FINRA Investor Education Foundation and NORC at the University of Chicago examined two questions:

-- Does participating in high levels of both math and financial education have benefits over financial or math education alone?

-- Does having both high math and financial knowledge have benefits over knowledge in only one domain?

According to the study, "boosting both financial and math knowledge may be most effective for fostering positive financial outcomes.

Additionally, "financial and advanced math knowledge should be thought of as complements rather than competitors. Having high levels of both types of knowledge is associated with greater financial behaviors than either math or financial knowledge alone." Read the report, "Insights: Financial Capability," at (tinyurl.com/4fs3ewp3).

If you are not convinced yet, there is another reason for promoting education. Lack of knowledge leads to bad actions. "American workers with a very low level of financial literacy are twice as likely to have decreased their retirement savings and more than four times as likely to have stopped saving for retirement compared to their peers with very high levels of financial literacy," according to the Personal Finance Index, produced by the TIAA Institute and the Global Financial Literacy Excellence Center (tinyurl.com/66wfh7es).

What does this all mean? Let me offer what I have seen in my 30-plus years of sharing knowledge and decision-making skills through my writing, lecturing and my work.

First, if you think you'll score a failing grade on a financial literacy test, ask yourself if at some time in the future, you will regret not taking the time to learn at least the basics.

Second, if you think you'll ace the exam, congratulations. But be sure you also test yourself on planning and managing your future financial picture. That world runs under a different set of rules. Be careful of overconfidence, especially if you yourself are in the financial services industry and have never retired before.

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The IRS estimates that 146 million individual tax returns would be filed for tax year 2023 (tinyurl.com/4acck2ja), and as of March 15, more than 71.5 million individual income tax returns had been filed (69.5 million of them being e-file returns), with 49 million refunds (worth a total of nearly $153 billion), according to the IRS (tinyurl.com/3t27nfkv).

One thing that the IRS warns can hinder your receiving a possible refund is an error that leads to a delay in processing your return (tinyurl.com/48z498sz). The following are some things to double-check before sending your return to the IRS:

Correct names, birthdates and Social Security numbers are needed for each dependent that is listed on your individual income tax return. The IRS notes that the Social Security number and person's name "should be entered precisely as indicated on the Social Security card." In cases when the person does not have a Social Security number, an Individual Tax Identification Number (ITIN) should be listed.

As I pointed out in a recent column, make sure to report all taxable income. According to the IRS, "This includes various sources of income such as interest earnings, unemployment benefits and income derived from the service industry, gig economy and digital assets." For more information on what income is taxable, read IRS Publication 525 (tinyurl.com/ycka3r5r). If you have any digital assets, you must answer the question on the tax return that asks about such. See tinyurl.com/25skd7pj.

Other important items you'll need to consider:

-- Remember to sign and date your return. If you are married and filing jointly, make sure both you and your spouse sign and date the return.

-- What if you are self-preparing your taxes and filing your form electronically? You'll need to sign the form and also input your adjusted gross income from the prior year. See tinyurl.com/2ncfw6u7 for more details.

-- The IRS encourages taxpayers to choose electronic filing. According to the IRS, "Electronic filing minimizes mathematical errors and identifies potential tax credits or deductions for which the taxpayer qualifies." Also, "Opting for electronic filing and selecting direct deposit is the fastest and safest way to receive a refund."

-- If you are choosing direct deposit for your refund, make sure that the routing and account numbers are correct (tinyurl.com/2s3bypv3). That way, you can avoid a delay in receiving your refund or having the refund misdirected.

-- If you decide to submit a paper tax return, make sure to review Form 1040 (tax year 2023), Page 114 (tinyurl.com/y8hays3r), to find the correct address for mailing your return, which is based on the state where you live.

Make duplicates of your signed tax return for your personal records. "Typically, taxpayers should retain records supporting income, deductions or credits claimed on their tax return until the period of limitations for that specific tax return expires," according to the IRS. More details on the length of retention for tax records can be found in IRS Topic 305 (tinyurl.com/5duz3fc8).

If you need to file a six-month extension request because you are not able to meet the April 15 tax-filing deadline, you can do so using the IRS Free File (tinyurl.com/2hb5rzaw) or by filing Form 4868, "Application for Automatic Extension of Time to File U.S. Individual Income Tax Return" (tinyurl.com/ycxmrdvk). An important note: While an extension gives you more time to file, "tax payments are still due on April 15 for most taxpayers," according to the IRS.

Taxpayers also can make a full or partial payment of their estimated income tax (indicating that the payment is related to an extension) using Direct Pay (tinyurl.com/5fxzd77d), the Electronic Federal Tax Payment System (tinyurl.com/39j68y24) or a digital wallet or debit/credit card. With this type of payment, a taxpayer will avoid having to file a separate extension form. See tinyurl.com/mryrd25w for more details.

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A reader reached out with a question about interest the IRS charges on tax underpayments.

For the 2023 tax year, "Samuel" paid a larger estimated tax than was due to cover his tax obligation. But the year before, he underpaid, and as a result, he owes the government interest (a penalty) for the underpayment for the 2022 tax year.

Samuel's question really has to do with reciprocity and ultimately, fairness: "Will the IRS now pay us any interest on this overpayment? It seems only fair that if they can charge us interest or penalty on an underpayment, they should then pay us interest for using our overpayment for the year."

In Samuel's case, an overpayment followed an underpayment.

According to an IRS spokesperson, this type of situation "is no different than a wage-earner who overpays their taxes through withholding and gets a refund as a result of filing their 2023 return."

"Normally, a taxpayer won't receive interest on their refund, unless it takes a long time to process their return," the spokesperson said, adding, "That happened a lot during the pandemic, and largely for that reason, the IRS had to pay interest on a relatively large number of refunds."

There is a special provision for those who make estimated tax payments, according to the IRS spokesperson: "If you overpay your 2023 tax, instead of receiving a refund, you can choose to apply that overpayment to your 2024 estimated tax payments. If you file on time, your overpayment will count as an estimated tax payment made on April 15, 2024, regardless of when you would have received it, had you chosen that option."

The basis for how taxes are paid and penalties levied goes back to the "pay as you go" nature of the tax system, which was set by Congress, not the IRS. The Current Tax Payment Act of 1943, passed during World War II, called for withholding taxes from paychecks and paying those taxes to the government (tinyurl.com/38kk2c68).

As the IRS explains on its webpage "Pay As You Go, So You Won't Owe" (tinyurl.com/vzjy8fk2):

"This means that you need to pay most of your tax during the year, as you receive income, rather than paying at the end of the year. There are two ways to pay tax:

"[1] Withholding from your pay, your pension or certain government payments, such as Social Security.

"[2] Making quarterly estimated tax payments during the year.

"This will help you avoid a surprise tax bill when you file your return. You can also avoid interest or a penalty for paying too little tax during the year. Ordinarily, you can avoid this penalty by paying at least 90 percent of your tax during the year."

According to the IRS spokesperson, the tax penalty "is designed to encourage people who either don't have withholding, or don't have enough withholding, to make these payments, make them timely and make them at sufficient levels."

The IRS provides more details on its webpage "Underpayment of Estimated Tax by Individuals Penalty" (tinyurl.com/477e9y4s). Included is information on how the penalty is calculated, interest on the penalty (additional details on interest can be found at tinyurl.com/2b9nsuhn), and removing, reducing or disputing a penalty.

"Of course, as we all know, there are many practical problems with figuring and making estimated tax payments, but that's also why there are thresholds and exceptions in the law that are designed to ease the burden," the IRS spokesperson said, adding that "[t]axpayers can, and often do, vary their estimated tax payments throughout the year to accommodate fluctuations in income."

If you are new to paying estimated quarterly taxes, be sure to review the IRS webpage "Basics of estimated taxes for individuals" (tinyurl.com/3w9ekftz) and IRS Publication 505, "Tax Withholding and Estimated Tax" (tinyurl.com/3mwahezp). Also, if you live in a state that has a state income tax, you will want to review the state's instructions related to who is required to make estimated tax payments.

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