Photo by Leeloo The First
The annual Tax Day filing deadline is fast approaching. You can get more time to file by requesting an extension. Just be sure to pay what you owe. Here’s how to do both.
I’m married to a procrastinator. Although I love the hubby, I do find his tendency to put things off annoying much of the time.
But every tax filing season, I see some value in his penchant for waiting to start (or finish) certain projects.
Sometimes, more-pressing daily concerns get in the way of working on taxes. Other times, you’re still waiting for key information and forms you need to complete your return.
Whatever the reason for pushing aside your taxes, or not even starting them, the Internal Revenue Service can help. Really.
Just send the agency Form 4868 by next Wednesday, April 15.
What is (and isn’t) extended: That’s the full form above. Its official name, Application for Automatic Extension of Time to File U.S. Individuals Income Tax Return, tells us just what it does.
When you send Form 4868 to the IRS by Tax Day — electronically is a good option — Uncle Sam will, without any questions, give you six more months to complete your annual tax filing responsibilities.
But, as the title all says, the new Oct. 15 deadline is to file your tax return. There is no extension to pay any tax you owe.
Pay some now or pay more later: A lot of people put off filing because they know they owe tax. The IRS knows that, too.
That’s why Form 4868’s line 4 requires you to enter an estimate of your tax liability. And it means a good estimate, not just some low-ball number you wish you owed.
Any unpaid tax amount is subject to late-payment penalties and interest charges.
The failure-to-pay penalty is generally 0.5 percent of your unpaid taxes per month, maxing out at 25 percent of your due tax amount. Interest, with the rates adjusted quarterly, also adds up, compounding daily. The current April-through-June interest rate is 6 percent.
Those charges start accruing on April 16 and continue until your tax bill is paid in full.
So, have the potential fiscal consequences convinced you to file for an extension and pay what you owe (or what you can)? Great! Here’s how.
How to file a tax extension request: The IRS offers taxpayers three ways to get more time to file their returns.
The agency’s preferred method is for taxpayers to electronically get more time to file. Do this by going to IRS.gov’s make a payment page and, after entering the amount you’re sending the U.S. Treasury, clicking on extension as the reason for the payment.
You’ll receive a confirmation number of your extension for your records. There’s no need to file any additional forms.
Electronic filing extension requests also can be submitted by your tax preparer.
Or you can use IRS Free File to send an electronic filing extension. Free File is available this year to taxpayers whose adjusted gross income is $89,000 or less. Eight tax software companies are participating in the IRS/private sector partnership program, with no-cost filing for eligible taxpayers available through Oct. 15.
The third way to get a filing extension is to go old school and request it by mail. Just download Form 4868 and send it to the IRS via the U.S. Postal Service.
However, if snail mail is your preferred method, you need to act quickly. Changes in the way the IRS determines a timely filed return (or extension request) mean that it now is not necessarily the day you drop your mailing off at your local USPS branch.
To ensure your Form 4868 meets the mailed-by-April-15 deadline, you should tell the postal clerk that you want to send it by certified mail or registered mail. Or you can ask for a Postage Validation Imprint, a special marking that indicates the postage paid and date accepted.
Yes, these special mailing options will cost more. But they also could help reduce or eliminate future unwanted encounters with the IRS.
Preventing additional penalties: Right about now, some of y’all wondering why go to the trouble of getting an extension to file if you have to pay your tax bill with the request?
In fact, you might be tempted to blow off an extension request altogether.
Don’t.
If you miss the April 15 filing due date or don’t get an extension by then, it will cost you even more.
Remember the late- and/or non-payment penalties mentioned at the top of this post? Well, there’s more.
The IRS collects a separate, and even greater, penalty when you don’t file a return or file it late. This is generally 5 percent of your unpaid tax amount per month, capped at 25 percent of your total tax liability.
When you combine the failure to file and failure to pay penalties, they could potentially hit 47.5 percent. And don’t forget about the interest charges.
But you can avoid these charges, or most of them if the payment you made with your Form 4868 filing is close to your final tax bill, by filing Form 4868 by the April deadline.
Then you can take your time to complete your tax return accurately, or hire a tax pro to do it for you, over the next six months.
You also might find these items of interest:
- Tax statements you need to file your tax return
- Don’t miss these 10 often-overlooked tax breaks
- April 15 is more than just the individual tax return deadline
Advertisements
🌟 Search Amazon Tax Products 🌟
The text link above is an affiliate ad. If you click through and then buy a product, I receive a commission.
