With the tax deadline tomorrow, you may be stressing out trying to get your tax return filled out at the last minute.
Or you may be begging a CPA to find some time to complete your return.
But either way, there is another option. You can always file a tax return extension.
How To File For An Extension
A tax extension must be filed by the tax deadline (typically April 15th – *see below), but will effectively push back the deadline to send in your actual return.
HOWEVER, this does not mean that you can delay payment. In order to file an extension, you must send in part or all of your estimated income tax!
This payment can either be mailed in (and must be postmarked by April 15th*) or it can be paid electronically by credit card or bank withdrawal.
Tax Filing Deadlines: Personal income tax returns are due on or before April 15th following the close of each tax year. When the due date for filing tax returns falls on a Saturday, Sunday or legal holiday, the filing may be made on the next succeeding business day.
Additionally, you must complete Form 4868 which can be obtained from any tax preparation provider. The IRS recommends that most people send in their Form 4868 electronically as the IRS will acknowledge receipt of the form.
One downside to filing for an extension is that you must pay interest on any tax you owe, but did not pay by the April deadline. Additionally, if you did not pay at least 90% of your tax liability by the April deadline, then you will be assessed a late payment penalty.
The main thing to remember is that you should pay what you can by the April deadline. Do not file an extension if your return is completed, but you cannot pay the entire tax payment yet. If you send in what you can and on time, the IRS will bill you later for the rest of your tax balance due.
Failure-to-file anything will cost you: You’ll be charged 5 percent of your unpaid taxes every month that your return is late, up to 25 percent, with a minimum penalty of $135. You might not owe the penalty if you have a reasonable explanation for filing late, according to the IRS. The agency asks that you attach a statement to your return fully explaining the reason. The failure-to-file penalty is harsher than the failure-to-pay penalty, so if you’re short on cash, the best thing to do is file on time (completed tax forms or an extension) and pay as much as you can. Source
More About Filing A Tax Extension
- Pros & Cons Of Requesting An Extension To File Your Taxes
- How To File A Tax Extension
- 5 Myths About Income Tax Extensions
- 6 Secrets Tax Pros Won’t Share With You
- How To Get A 6-Month Tax Extension
- Secrets When Filing Taxes
- Haven’t Filed Your Taxes Yet? Here’s What To Do
- Second Tax Extensions Aren’t Available To Just Anyone
Very few people use the words fun and taxes together… and don’t worry, I’m not one of them. I hope to make taxes easier to understand and less of a hassle. I am a CPA with a Master’s in Accounting, and I’ll do my best to help explain many of the tax options available today.