If you can’t file your return by the April 15th deadline, the IRS allows you to request and extension that will give you an extra six months to file
Is the month of April sneaking up on you? Is the time until tax day already loaded with obligations? Is that pile of receipts on your desk beginning to look more and more intimidating, the prospect of filing your return by the deadline more and more remote?
Don’t worry, there’s a way you can buy yourself a little extra time to get through the work of filling out your return – it’s called a tax extension.
First, remember that this year tax day is back to its normal date of April 15th. If you don’t have enough time to get your return together before then, you can apply for an extension.
Do this by filing Form 4868 [Application for Automatic Extension of Time to File U.S. Individual Income Tax Return] before April 15th. If your application is accepted, the IRS will grant you an additional six months to file your return. You then have until October 15th to get everything squared away with the IRS without accruing any of the penalties that normally accompany filing late.
A tax extension can be great, but while it does give you an extra six months to file, it does not give you an extra six months to pay. You still have to estimate and pay your tax liability by the normal April 15th deadline.
When you fill out Form 4868, the same one you use to apply for an extension, you will also have to estimate your tax liability and include payment when you file the form. This is to make sure that people aren’t requesting a tax extension to avoid paying the IRS.
Even if you refuse to pay, the agency may still grant you an extension, but this is only an extension of time to file, not to pay. You will be considered delinquent in the payment of your taxes and failure-to-pay penalties and interest will begin to accrue on your unpaid tax liability.
When you finally file your return – sometime between April 15th and October 15th – the IRS will make up the difference between what you paid as your estimated tax liability and what you actually owe. If you overpaid back in April, you’ll get the difference back in the form of a refund, and if you underpaid you will have to make an additional payment.
Ultimately an extension is an awesome option for people who are buried under paperwork and need a little reprieve on completing their return. It is not a good option for people looking to avoid or delay paying their taxes.
You can request an extension right here on PriorTax starting in April.
Photo via Roberto Ferrari on Flickr.
Tags: tax extension